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Bitcoin Tops $1,000 For the First Time
An anonymous reader writes with this bit from The Next Web "Bitcoin hit a new milestone today, passing the $1,000 mark for the first time. The virtual currency is currently trading above the four-digit figure, with its highest at $1,030 on Mt. Gox, one of the largest exchanges. Last week, Bitcoin's high for the day was $632. That means its trading value has surged 62.83 percent in a week, assuming we're looking at just its high points. That figure could of course rise even further if Bitcoin continues to push further up throughout the day."
Great! Lets do a 100 dollar bet: if the price at January 1st is lower than now I pay you $100, otherwise you pay me $100. You're in?
I wish I had mod points ^_^ but yeah, that is an element that differs from classic bubble mechanics.
We might encounter other problems though such as traders making BTC unproductive for people using it for goods and services. It could also crash if some large (or simply enough) players cash out and deplete various exchange's ability to convert BTC into other currencies, which could cause exchanges to close shop and thus reduce the utility.
Though historically there are plenty of examples of bubbles of easily subdivided items, even including things like gold. So you can not get a housing-style bubble with BTC, but that does not make it immune from the general pattern.
I remember a lot of argument on old bitcoin posts about whether bitcoins were a deflationary currency or not. It is certainly looking that they are right now. The value of them is increasing with time allowing one bitcoin to buy more and more with each passing day. So with the current market, why would someone spend bitcoins? They can wait a day and spend less coins for the same goods, or wait two days and possibly spend even less. This will kill it as a currency. Bitcoin will be solely used as an investment for speculation soon.