Anybody that has been paying attention to Bitcoin as of late is aware of the crypto-currency’s sudden, massive increase in value compared to the dollar. Proponents of Bitcoin are pointing to this climb as proof that the currency is a real contender in the currency market and detractors have been saying that the rise is a bubble that is bound to burst. As an advocate of crypto-anarchism I have a keen interest in crypto-currencies, which offer a means for individuals to perform transactions in a fairly anonymous way. With that said I don’t see how this rapid growth in Bitcoin’s value is anything but a bubble. Rapid rises in value, such as a 50% increase in a 48 hour period, tend to be followed by a rapid drop in value. There are many potential reasons for this. Players of the stock market will sometimes perform what is called a pump and dump. Through various methods these players will artificially increase the price of a held stock and sell it when they predict the game is up and the price will soon fall. I wouldn’t be surprised if we later find out that somebody was performing a pump and dump style game with Bitcoin.
The part of me that wants to see crypto-currencies become pervasive wants to see Bitcoin continue to increase in value. Unfortunately the cynical asshole side of me is fairly certain that Bitcoin is in for a major drop in value at some point in the future (it may be tomorrow or it may not happen for a while). I am going to put myself on record saying that Bitcoin will experience a rather notable period of devaluation compared to the dollar. Since Bitcoin is established I don’t believe the devaluation will be as severe as the last period but I believe it will bit harsh enough to create a great deal of butthurt for those who have recently entered the Bitcoin market.
With that said, I base this prediction entirely on a consultation I had with Odin and a ghost claiming to be Ludwig von Mises. Anybody who has studied Norse mythology knows that Odin likes to fuck with people and the apparent ghost of Mises had a very minor, and potentially fake, German accent leading me to doubt its claim. Take my prediction with a grain of salt and wash it down with copious amounts of alcohol.
2 thoughts on “Bitcoin’s Rapid Rise in Value”
It might be a bubble but given the limited total of bitcoins with only 21 million ever to see the market there is a lot of room for growth left.
Technically, since each Bitcoin can be divided to eight decimal places, the maximum number of units is something around 2.1 quadrillion. Due to that I’m not sure if the prices we’re seeing per coin can be sustained for any length of time (I hope those prices can be sustained, I’m just seeing too many indicators that the current prices are a bubble).
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