At these high prices bitcoin is just a bad investment because it would take a huge increase in market cap for the prices to go up higher. You can forget about easy returns. Actually, for the risk you are taking in bitcoin you are better off choosing risky stocks to put your money in. You will probably get a higher return on your money for less risk.
It seems that volume is getting lower and lower, I saw on Mt Gox a few days ago 24 hour volume in the 3 or 4,000's.
It seems that if people do not sell and just sit then it does cause scarcity. However, it is like a house of cards. If anything was to happen which would cause just a small increase in bitcoin holders to want to cash out the price would collapse. This may not happen as bitcoin holders are probably financially secure and probably have above average income and intelligence to just be able to buy them in the first place.
However, you are taking risk with your money at these high bitcoin prices. Just being that you are investing in a house of cards is risky. You will also need a considerable amount of money invested to make any significant gains in bitcoins at these prices.
The other thing is as bitcoin price stagnates, more speculators will put their money in other coins that see higher growth. Bitcoin and digital currencies are for the most part just a way to gamble. Dogecoin seems to be the new coin now that people are throwing lots of money into. This almost proves its just a big gamble.
But I honestly would rather invest in a more risky coin for $1000 to make $10,000.
Then invest $20,000 in bitcoin to make that same $10,000
I can live with losing $1000, but not $20,000. This is why I don't see a lot of money flowing into bitcoins anymore. The only way the price will rise is if volume gets lower and lower, but then you are investing in even a bigger house of cards.
It seems that volume is getting lower and lower, I saw on Mt Gox a few days ago 24 hour volume in the 3 or 4,000's.
It seems that if people do not sell and just sit then it does cause scarcity. However, it is like a house of cards. If anything was to happen which would cause just a small increase in bitcoin holders to want to cash out the price would collapse. This may not happen as bitcoin holders are probably financially secure and probably have above average income and intelligence to just be able to buy them in the first place.
However, you are taking risk with your money at these high bitcoin prices. Just being that you are investing in a house of cards is risky. You will also need a considerable amount of money invested to make any significant gains in bitcoins at these prices.
The other thing is as bitcoin price stagnates, more speculators will put their money in other coins that see higher growth. Bitcoin and digital currencies are for the most part just a way to gamble. Dogecoin seems to be the new coin now that people are throwing lots of money into. This almost proves its just a big gamble.
But I honestly would rather invest in a more risky coin for $1000 to make $10,000.
Then invest $20,000 in bitcoin to make that same $10,000
I can live with losing $1000, but not $20,000. This is why I don't see a lot of money flowing into bitcoins anymore. The only way the price will rise is if volume gets lower and lower, but then you are investing in even a bigger house of cards.
I see stuff like this written all the time and I must say, I think both bolded points are utter nonsense. In bitcoin's history, we've seen price drops of over 90% and the analogy to this being a house of cards is an attempt to paint bitcoin in an unfairly pessimistic light. Usually when a house of cards collapses, it doesn't quickly resurrect itself.
i guess i get the point Edward was making. however, there is and will be more and more money flooding the Bitcoin economy as new business emerges, VC injecting cash, wall street joining the fun.. etc etc.. these levels of investment are not light and they surely will take bitcoin to the next level
