Re: And yet...
Hasn't it been down at $20 within the last 12 months? Or was that a few months before?
Not since I started paying attention to it again, but that hasn't quite been 12 months yet.
One of the problems with Bitcoin is we don't have any figures as to what the economy is.
What are you talking about? We have exact figures available on demand for any point in time going all the way back to when the first one was minted.
So we don't know how much real trade happens in BItcoin, how much it gets used for drugs, and how much it's just being hoarded.
'Drugs' would fall under real trade (being illegal doesn't make it any less real). Most hoarders aren't moving their BTC around from wallet to wallet, so that one's not terribly difficult to figure out either.
Without that it's only guesswork that it's a bubble. But good guesswork when you consider that there are several people who've publicly said they're investing tens of millions of dollars into it, and yet daily turnover rarely gets even close to the million mark.
I've no idea if it's a bubble or not, but I'll say this: every nay sayer to Bitcoin thus far predicting a pop in the bubble has been wrong. The market has dipped a few times, but there hasn't been anything so drastic as to call it a popping bubble, and it has recovered pretty quickly from the few events that have come close.
If everyone who's investing in it leaves at the same time then the values will tank, but isn't the same true of most investments? In that regard the value of Bitcoin is much like the value of fine diamonds. On their own they're worthless, if pretty, rocks. But because people want them (and because a certain company with a near monopoly has spent the last century manipulating the market) they have a much higher value than they otherwise would.
Bitcoin has value because people want them. Whether they want them because its an investment or because its an unregulated currency is irrelevant. If that changes then Bitcoin loses its value. If it remains true then Bitcoin will continue to have value. If the Bitcoin user base can continue to grow as it has the last year or so I'm inclined to say that it will continue to have value.
Am I going to run out and buy some? No, probably not. A volatile market is a high risk market and I don't have the money to blow in high risk markets. Do I think those who do are 'gullible'? Nope, not at all. They understand the risks and they play the game. Do I think less of they people who point and sneer at the people making these high risk investments? Yes, yes I do. Those 'gullible' people who bought Bitcoins a couple weeks ago are looking at a 3:2 return on their investment if they sell today. And if the trend holds it'll be more like 2:1 by the end of the week. That leaves the people calling them gullible looking like they've got a case of sour grapes.