Quote from: aliro38 on December 15, 2014, 10:40:34 PM

Quote from: Elwar on December 15, 2014, 08:09:02 PM

Quote from: aliro38 on December 15, 2014, 04:49:31 PM

I don't get it?!
That's marketcap. Nothing more, nothing less.
See here: http://www.investopedia.com/articles/basics/03/031703.asp or here http://en.wikipedia.org/wiki/Market_capitalization if you're not familiar with it.

Edited to fully respond to the above: Sorry, but it was simply not implied anywhere that "all 13.6 million bitcoins are traded daily on the exchange".

1. The bitcoins traded for fiat are what determines the price. 2.When the market cap of Bitcoin went from $1 billion to $5 billion do you honestly believe that $4 billion worth of money flowed into Bitcoin? 3.Or was it perhaps a small percentage of the coins on the exchanges that were purchases raising the price?

On points that I've added to your post for clarity:

1. Yes, that's market price. However, judging by the last 12 months charts and by the very last auction it seems that market value is still bellow (possibly significantly bellow) market price, isn't it? In other words, market is not in a state of equilibrium. http://en.wikipedia.org/wiki/Economic_equilibrium
Please note that apparent stable price (apparent price consolidation) has very little to do with equilibrium.

2. A year ago market cap was almost $14 billion. Did $14 billion flow into Bitcoin? Clearly not. Do market participants believe $14 billion will flow into it? Maybe, maybe not but as we speak it seems not many believe it will do so in the near future. So to respond: no, those 4 billion did not flow into bitcoin at that time but some of the money did flow and that was enough (in terms of amount and flow rate) for many market participants to believe/anticipate/speculate that the rest of the money will flow into, in a reasonable amount of time. We are not far from finding out if their belief was justified or not...

3. Artificial scarcity and low market depth on exchanges can only manipulate the price that much. No, that's not the driving factor. On contrary, why do you think the big stakeholders didn't distribute part of their shares so as to help the ecosystem? Please don't tell me it's because of greed because I won't buy it. Well, so perhaps because they couldn't sell? What's sad imho is that if they can't do it very soon, considering there are a max of 650.000 wallets (possibly only 2-300.000 active bitcoiners as per the excellent recent analysis of Jorge Stolfi) after about 5 years, bitcoin won't have any chance to catch up with mass adoption. We are already lagging well behind the historical growth of mobile phones http://addictivelists.com/top-10-countries-with-most-cell-phone-users-in-2014/ but remember those were back in the 1985. We should have a growth comparable with internet, FB etc. Practically mass adoption is pretty much busted imho and only a strong move followed by a hyper-exponential growth in no. of users can bring us back on track. What strong move? Huge collapse of price & major coin distribution... toward hoards of new users bringing in yet more people and their fresh money... A huge reset of that kind is much needed. Each passing day without that happening is exactly the opposite of success but mere a slow move toward fading-out. That's my view. I don't think bitcoin will die but if it remains a niche product for 5-10-50-100 millions users will be much like failing when compared to it's potential...

To understand my rationale, I've used the equation of enterprise value http://en.wikipedia.org/wiki/Enterprise_value together with some simplifying assumptions there. (Bitcoin ecosystem is an enterprise, albeit a very unusual one). On major assumption I've made is the enterprise value of bitcoin is growing and will continue to grow (albeit slowly imho). I don't have the proof it is true but I believe you'll accept it. Anyway, throw some figures at it and hopefully you'll agree that at equilibrium a heck of a lot of money will be needed to go from 350 to anything above 2-3k.

And yet here you are..