So if bitcoins only become as big as magic the gathering (which, lets face it, not many people have heard of), we may see $25 billion in the next 5 years. By your simplistic calculations, that would put the price of a bitcoin at > $3,000.
I don't understand this comparison. people spend money on games.
they expect returns on investments.
I was merely trying to drive home how small an amount $170 mil is.
And the piece you might be missing is that this isn't some pyramid scheme where the money would only come from people investing. Say a poker site open up that is as big as pokerstars but uses bitcoins. In that case, people will want bitcoins to _use_, not as an investment. Pokerstars generated > $10 billion in deposits a year (before the US restrictions). If that much money is trying to funnel itself through the bitcoins system, the price of a bitcoin will be huge.
And that is just one industry. There are thousands of industries that could benefit from bitcoin. Some less legal than others. If a couple catch on, there is a chance that the value of a bitcoin will be so huge we won't even think in terms of bitcoins anymore. But it is only a chance, and maybe a very slim chance. That slim chance is what is giving bitcoin its value right now.