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Bitcoin Surges 10% To All-Time High Above $2,700, Has Now Doubled in May (cnbc.com)
An anonymous reader writes: In another intraday jump of more than $200, bitcoin surged to a record Thursday on strong Asian demand overnight. Bitcoin jumped more than 10 percent to an all-time high of $2,752.07, more than twice its April 30 price of $1,347.96 according to CoinDesk. The digital currency last traded near $2,726. At Thursday's record, Bitcoin has now gained more than 45 percent since last Thursday and more than 180 percent for the year so far. "There is no question that we are in the middle of a price frenzy," said Brian Kelly of BKCM, in a note to clients Thursday. "There will be a correction and it could be severe, but it's unclear if that correction will start from current prices of $2700 or from some place much higher."
Your ability to get a dollar out of the BTC market today for a dollar put in yesterday depends heavily on the participation of others putting their dollars in today. If you examine the data behind the charts https://blockchain.info/charts... and https://blockchain.info/charts... it is very clear that speculative trading has repeatedly driven BTC values up followed by a market value collapse of BTC. People stop putting their money in and instead pull it out and the amount of time it takes to get their money out goes from minutes to days. If there is no speculation and all BTC coins are used for ephemeral transactions, then the total amount of hard currency backing BTC would be around the daily volume of BTC transactions in a day: $1 Billion dollars. However people are behaving as if all of the BTCs are worth $40 Billion dollars. The speculators are the "long-term" holders of BTC, however only a small fraction of their holdings can actually be converted to hard currency before the entire BTC system collapses ... in the 2% range. Everyone is depending on everyone else not to blink, historically not a good bet.
There is bitcoin acceptance and there is bitcoin usage. The two are not the same, although when you a scrappy itty bitty currency fighting for recognition, the difference may not seem so important.
Bitcoin can be accepted and be beaten out by competing currencies. There will definitely be digital blockchain competitors in the future. Plus once we accept that bitcoin is a currency is suddenly is compared directly with the big boys, for both good and ill. Consider the USD has approximately 100% "acceptance" across the entire globe, yet no one assumes that global economic growth guarantees anything about the price of the USD.