Quote from: Faisal7 on June 02, 2012, 09:03:38 PM

Something is holding it back.

What is it?

Struggling to rise? It is up 10.5% so far for 2012, up 6.5% for the second quarter, 2012, and up half a percent for June already.

So the market (the price where the supply crosses with demand) says a bitcoin is worth about $5.22 right now.

What the market isn't taking into consideration is how Bitcoin as an open protocol is seeing a growing level of mass collaboration occur. This was already priced in, to some degree, already as there is no way even a fraction of the $40+ million of the currency was necessary to support the level of activity in the Bitcoin economy up until recently.

What has happened in a few short months though is that many assumptions are truly starting to pan out.

It was expected that bitcoin had great value in filling a gap in online gambling. SatoshiDICE is proving that there was latent demand for this. Any speculator considering the potential a year or three out will realize that an gambling service that can pay out 98.5% will start to receive some market share that might otherwise have gone to casinos or other online wagering at 97% or 93%, or whatever. And SatoshiDICE could probably compete at a smaller house advantage if it were pressured to do so from competition, making the advantage over casinos even greater. This would be a driver for bitcoin demand.

It was expected that there would be easier ways to buy Bitcoin. Cash deposits at a bank in U.S., Canada and Australia are inexpensive and instant, and now with BitInstant, add 7-11s, Walmart, CVS, etc as other places to do cash deposits. They also made it easy to convert cash to bitcoin in Brazil (Boleto) and Russia (Qiwi, cyberplat) as well -- two very large and populated countries where acquiring Bitcoins had previously been difficult.

This was expected though (especially since it was announced back when bitcoin was valued under $5), but the market hasn't quite realized how large the demand by these two new countries could really become.

And Bitcoin is starting to approach the functionality needed for use by individuals face-to-face. Service is still not utility-level (e.g. Blockchain.info's service going down for several days last month) but look at Coinapult's SMS wallet, for instance:
- https://coinapult.com/sms-wallet
That seriously shows how Bitcoin could start to compete against M-Pesa and Western Union in Africa and parts of Asia, for instance. All you need is a feature phone and you can receive a remittance payment from a family member. (What's missing next is a hawalder or local exchanger willing to convert their bitcoins into the local currency that is used.)

But the market is not considering what the demand for bitcoins will be once that starts to become a common occurrence.

Having a digital currency permeate the globe organically is something that has never been done before, so the market doesn't know how to price it. We people reading this forum do know, but we collectively aren't putting much more than the $37K USD worth into bitcoin that is required each and every day for the exchange rate to just stay stable even, nonetheless increase.

And having temporary setbacks, like Bitcoinica and that whole mess, and Apple showing what dicktards they are with their App Store rejections, and Dwolla imposing the hurdles they did -- those all kick at Bitcoin's foundation and might help explain why even though there are many more great developments with bitcoin, bitcoin's exchange rate ascent will only come after it has proven itself and not earlier based on hope.