I know it's quasi-taboo to discuss SR here, so let me just summarize the relevant facts (none of which involve anything illegal) and try to focus on the economic question here:

* There is a website called "SR" which is currently the major (only?) "killer app" for bitcoin -- probably the one thing the average person might want to use bitcoins for, and for which there is no alternative to bitcoin.

* I believe "SR" to be the only major source of demand for bitcoins aside from speculation.

* In the last month or so "SR" implemented a "hedging" mechanism whereby transactions are now priced in USD and bitcoin are used only as a clearing mechanism.

Before the hedging mechanism was in place, sellers were exposed to fluctuations in the USD/BTC price from the moment the purchase was made until the time the buyer confirmed receipt of the goods -- rarely less than a week.  There was essentially no way for sellers to reduce this exposure.

With the new "hedging" mechanism the "SR" site absorbs the risk during this time period in exchange for a small fee.

I contend that sellers are now tempted to try to reduce their USD/BTC exposure to zero, because it is now possible (previously it was impossible).  This means they sell their BTC as quickly as possible after being paid.  This could make the difference between a few days of exposure or a few hours of exposure, whereas previously the seller was exposed for at least a week (or more) no matter what, so an extra day of exposure wouldn't make a huge difference.

Net result: people performing actual, real-world transactions in BTC are no longer holding it for very long.

Consequence: far fewer people are holding BTC for any appreciable amount of time, and the only ones who are doing so are the speculators (like 'em or hate 'em, it would be better to have more diversity here).

Thoughts?