Bitcoin Just Surged Past $4,000. TechCrunch Explains Why (techcrunch.com)

Saturday night TechCrunch reported the following about Bitcoin: 24 hours ago the cryptocurrency was trading below $3,700. About an hour ago it surged passed $4,000 and has no signs of stopping. It's now trading around $4,135.00. For reference, a week ago Bitcoin hit an all-time high as it passed $3,000 for the first time... So the million-bitcoin question is, why now...?

Two weeks ago Bitcoin went through a hard fork, and came out essentially unscathed... A few days later Bitcoin locked in SegWit, a code modification that fixes malleability issues and frees up space in blocks, allowing for more transactions to be stored in each one. These two code-related developments have helped boost conference in Bitcoin's future. Another reason -- the ICO frenzy. The amount recently raised via initial coin offerings have now (at least temporally) topped amount raised via early stage venture capital. Just last week Filecoin raised $180 million in a few hours. Most investors have to convert fiat currency to bitcoin or other cryptocurrencies to participate in ICOs, which could be driving up the price (and providing some investors with their first taste of bitcoin). Another reason -- Wall Street's new obsession is bitcoin.

Comments

Because people are idiots

[Anonymous Coward]

Simple.

Re: Because people are idiots

[GLMDesigns]

I'm a big bitcoin proponent but government can stop it. They can shoot everyone who promotes bitcoin or possesses bitcoin; then they can kill everyone who they think promotes it or possesses it. That would do the trick.

Of course, the zombie apocalypse would end bitcoin as well. No electricity. No internet. No bitcoin.

Outside of draconian circumstances though - BTC is here to stay.

Re: Because people are idiots

[tlhIngan]

I'm a big bitcoin proponent but government can stop it. They can shoot everyone who promotes bitcoin or possesses bitcoin; then they can kill everyone who they think promotes it or possesses it. That would do the trick.

Of course, the zombie apocalypse would end bitcoin as well. No electricity. No internet. No bitcoin.

Outside of draconian circumstances though - BTC is here to stay.

It's here to stay as a toy currency, that's it. Until it can scale up to millions of transactions per second instead of the sub-100 right now (it was 7 pre-split), it's not useful as a general currency because you can't, well, use it. People don't want to wait days or months for their transaction to be posted. Even back when 10 minutes was the average it was still pushing it.

And yes, networks like Visa and Mastercard are doing that volume.

Yes, the big problem might be blockchain technology because millions of transactions per second would ramp up the blockchain size quite rapidly - if each blockchain entry was 100 bytes, 1 million transactions would add 100MB to the blockchain in a second. If you scale up to the 7 million or so per second Visa does, that's the better part of a gigabyte per second of blockchain growth.

Hisotry repeating?

[istartedi]

ICO frenzy? Dot-coin bust? I have to be honest. I didn't think it would run this long. Well-played, guys; but nobody rings a bell at the top. However, we probably haven't hit the stage yet where we have Uber drivers giving hot ICO tips. If there's a counterpoint to the "nobody rings a bell" claim, it's the ol', "got out when the shoeshine boy offered a stock tip" story.

Re:Hisotry repeating?

[JaredOfEuropa]

History doesn't repeat but it rhymes. Last time, the crash involved somewhat viable companies and ideas that were vastly overfunded and overvalued. This time round, I see nothing but tulips and outright scams. Just look at that filecoin thing. I wonder if, in a few weeks, they'll have part of their supply of coins "stolen by hackers" as well, or if they'll syphon the money out in other ways and simply fold. Or perhaps some other idiot will buy them.

Why now?

[PopeRatzo]

Because the world is fucking coming to an end. The guys with nuclear launch codes are waving their dicks at each other, the bees are all dead and Nazis are marching in the streets with tiki torches from their moms' backyards.

So why shouldn't wealth be made out of nothing? Me, I'm holding out for TrumpCoin.

Re:Why now?

[Anonymous Coward]

trumpcoin is going to be amazing. it'll be the best coin, it's gonna be tremendous. tremendous;

Re:Why now?

[helga the viking]

Bitcoin is not a currency its a commodity.

http://www.win-vector.com/blog...

Why don't you read up on what drives hyperinflation. Hint its not 'printing money' its what money in circulation can buy. Printing money is false cause of hyperinflation wrongly associated because its the wrong response to an underlying problem. 'printing money' is a bulls**t non-specific term that does not really mean anything. (Can cover one or more scenarios which can be quite similar but also quite different).

Zimbabwe: give modern farms to war veterans during some of the worst drought years on record and you'll find what a unit of currency buys is a lot less. Then give corrupt government officials large loans which they don't have to pay back which they immediately exchange for other currencies and you get ingredients for hyperinflation.

Venezuela: archaic unavailability of modern currency exchange in 2012, and again in February 2013, the government sharply reduced the availability of foreign exchange. It was during this time that shortages of basic goods accelerated, along with inflation and the black market price of the dollar. The official exchange rate, at which the government sold the vast majority of dollars earned from oil sales, was at 6.3 Bolivares Fuertes per dollar. But a parallel market already existed, and the shortage of dollars at the official rate drove the parallel market sharply upward. At the same time, the higher parallel market price of the dollar increased inflation, because it increases the price of imported goods.

http://bilbo.economicoutlook.n...

Wall Street's obsession

[MMC Monster]

Wall Street's obsession isn't BitCoin. It's blockchain technology. They're seeing it as a cure for thousands of unrelated issues.

BitCoin isn't even their focus. The software is freely available. They're looking to make their own forks (multiple) of LiteCoin and go from their.

Source: Friend is a Vice President at a Wall Street firm. I can't talk to him for five minutes before he moves the conversation to blockchain technology.

Re:Wall Street's obsession

[JoeyRox]

Actually, Wall Street's obsession is in enriching themselves from the next greater-fool bubble. Bitcoin serves that role nicely.

Corporations are stockpiling

[DalM]

Corporations, government agencies, hospitals and more are stockpiling Bitcoin because of Ransomware attacks. That's 100% the explanation for the rise in value. This is why we need to make owning, buying and selling bitcoin illegal. If we made it illegal, these organizations would be forced to sell destroying it's value. If it's valueless, and no one is legally able to buy it, then the Ransomware attacks will go away. Cash is much, much harder and more dangerous for Ransomware writers to collect.

Liquidity

[Registered Coward v2]

How easy is it to turn bitcoins into Euros, Pounds or Dollars? A cursory search shows limits of around 3000K $ per day, so even 300K worth would take about 3 months, and 3 million $ around 3 years. It would seem to be a forced buy and hold investment with a lot of downside risk if it crashes; or even if a lot of people start cashing out which would drive the price down. Is there an easy way to turn say 1 million of bitcoin to Euros, Pounds or Dollars? You want to get out before a large sell order drops the price significantly. can exchanges cover say 1000 people pulling out 3000k at once? Will they commit to the price at the time of the request or recalculate the value due to a price drop?

Re:Liquidity

[Kjella]

According to some market volume data I found >100k Bitcoins or $3-400 million change hands every day on all the exchanges in total, so the market should have no problem cashing out a million in a day. If you can find an exchange that'll let you place a single million dollar order is another story, but if you really want to they'll probably let you.

Will they commit to the price at the time of the request or recalculate the value due to a price drop?

Any price you get from the exchange will be the last traded price. It is not an offer and there's no guarantee you can trade at that exact price. A market order is done at unknown price "I want to sell 1 BTC (at the highest possible price)" and the exchange will match it with the highest buy order(s). If there's a flash crash it'll still be sold, no matter how low the price goes and then your price becomes the last traded price.

The alternative is a limit order "I want to sell 1 BTC at no less than $3000", which may be filled (or partially filled) if there's offers above $3000 but will remain unfilled (that is, unsold) if the price would dip below $3000. It's pretty standard for stock exchanges but if your order is small relative to the trade volume and the volatility low compared to the latency it doesn't matter. Even if Bitcoin can crash in a day it doesn't usually swing that much in the milliseconds it takes your order to reach the exchange. It's the $1000 you can lose overnight not the $1 you can lose between clicking sell and actually selling you should worry about.

exactly why its not a good investemtn.

[helga the viking]

Its not a 'currency' never has been does not in any way fit the definition of a currency its a virtual commodity. Get over it. http://www.win-vector.com/blog... If anything the last 6 months has shown why its too volatile for normal people to contemplate getting into. Of course welcome wall street ponzi-scheme into the mix, its like a big homeopathic cures conference, no shortment of excited con-artists. Eventually the gig will be up. This will happen when some governments legislate, taxes it in some form and the special interest from the community most interested in the technology will be circumvented. (was to avoid tax wasnt it ;-) If i wanted a commodity that's virtual and takes big oh NP complexity to mine it would have been good if all that energy mining the blocks also cured cancer, looked for ET or some other things . (Hint did something useful)

Re:Still waiting...

[helga the viking]

Monetary Base = Reserve balances + vault cash + cash in circulation.

M1 = Cash in circulation + Private-bank checking accounts of non-banks, non-federal, non-official foreign economic units.

Best to question by what measure is money "significantly easier to come by today than it was in the 17th century"

A currency issuer (government) drives use of currency by spending (issuing) and taxing (deleting) in said currency (enforces this by all legal and ultimately military means) and has not changed since 17th century (or before).

The people who say "There is a heck of a lot of money out there. Too much, according to some" probably don't understand basics like reserve balances don't EVER circulate in the non-bank part of the economy as an asset on the private sectors balance sheet. (They cant be found in a persons bank account balance rather how banks settle their own reserve balances). The of course there are all those people living in poverty who cant find jobs or have enough money. *at some point the people saying there is "too much" don't understand basic accounting and are out of touch with reality of the 99%.

Bit coin is not 'money' its a 'commodity' and one for that matter that does nothing better than act like a currency (in the way homeopathy cures cancer). When people work that out guess how much it will be worth. ;-)

I can explain some of it too, with some graphs.

[AbRASiON]

Here's some data which essentially completely confirms a lot of it is money laundering.

News from late Nov 2016
https://www.google.com.au/sear...

Reaction to said news (click 1 year on the chart)
https://www.worldcoinindex.com...

.
.
.

Now, see this news also, Feb 2017
https://www.google.com.au/sear...

See the reaction in other digital currrency markets (again, click the 1Y chart)
https://www.worldcoinindex.com...
https://www.worldcoinindex.com... -- *(!!)

Now, finally look at your local property prices, especially if you live in Vancouver, Toronto, London, Sydney, Melbourne, Auckland.
Any way money can be gotten out of China, it will be by the wealthy / ultra wealthy. The change to my city in the past 5 years, is .nothing. short of utterly astounding. I repeat, *utterly astounding*, to the complete and utter detriment of the locals under 40 / 50 who don't own a place, they're boned. no chance now.

*
Regarding litecoin, this one is .particularly. telling, that coin was the "b tier" coin to bitcoin, the silver to gold if you will. Like bitcoin, it had a big run several years ago and then, it died off to a stagnant level, logically so too, why should there even be more than 1 digital currency?
So here's a coin which has settled to a flat, sensible price, then due to talk of China making some moves against BTC exchanges in Feb 2017, is suddenly .booming.insanely. in Mar 2017.
Most of the world buy their goods from there, we're sending our money to China en-masse, immense amounts of it, the wealthy there, are in turn getting out of the country and picking up the premium property around the world. Can't blame them to be honest, devastating for some of the locals though (myself included)

Where are those Bear BTC ETFs?

[ayesnymous]

Need to short this thing.

Easy money creates bubbles

[Spy Handler]

I'm starting to think the Fed is largely responsible for fueling the current bubbles, including Bitcoin. Artificially low interest rates, expansion of the money supply, Quantitative Easing in its various iterations (version 1, 2, 3, and now 4 coming).

Ever watch the movie Big Short? It explains the 2007 housing bubble but puts the blame on evil bankers and their subprime loans + mortgage-backed securities. Well yes the bankers are greedy and probably evil, but the movie misses the point -- the ultimate driver of the bubble was Fed flooding the market with easy money. If the cheap money wasn't there, bankers wouldn't gamble so recklessly. Then once the housing bubble took off and home prices just kept going up, loaning more of the cheap money to low-income people with no hope of ever paying it back seemed OK because house prices were rising so fast that the equity in the house would cover everything. Of course they didn't consider the possibility that housing prices might fall...

Fed should not have the power to set interest rates, interest should be determined by free market forces. Note how they *never* set the interest rate above what would be a reasonable market rate, it's always below.