Bitcoin Price Defies Expectations Cryptocoins

Four days ago, I wrote an article describing how Bitcoin nearly hit the $600 mark during its surge, stopping at $585. The price increase slowed for a day or two, and Bitcoin’s value remained steady. Over the past 48 hours, however, Bitcoin’s price has risen dramatically, from $570 to $640, a 12.3% increase.

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  • Predictions Still Plausible?

After the initial surge four days ago, CCN writer Venzen Khaosan predicted that the “price will reverse from current levels around $600 and may retrace at least 50% of the advance to $520″, and that “traders and investors should brace themselves for a strong price reversal.” That certainly didn’t happen – in fact, quite the opposite. But could he still be right? Another CCN writer, Clay Ross, agrees with Khaosan. Ross said, “If you look at the graph below, it looks like the peak today is 617 USD per BTC and that it will slowly do a reversal down to anywhere between 580 to 600 USD per BTC.” Both Khaosan and Ross could still be right – we’ll just have to wait and see.

  • Signs of Slowing

Unlike my previous analysis, I’m not seeing signs of slowing in this recent surge. Yesterday, when one Bitcoin was worth $620, I thought the rise would slow down. I was mistaken, however – it’s since risen to more than $640. As usual, the price could continue to shoot up – or, it could go down, like some analysts predict. It could also remain steady, something that Bitcoin certainly isn’t used to.

Bitcoin’s value over the past month


As usual, the cause of this surge can be attributed to many things. I think it’s because of the lack of bad news recently – no serious drama has happened over the past two weeks, which at this point is unusual. DISH Network choosing to accept Bitcoin could also have contributed to the rise, as this is good news. Bitcoin’s value has remained volatile throughout its history.

Bitcoin Reaches New Heights

As the value of Bitcoin skyrockets on Bitcoin trade exchanges, many consumers are feeling a pitch of anxiety. Currently the price of Bitcoin in USD hovers around the mid to high $40 range. Many are speculating on what the future holds, but because crypto-currency in general has a short history there is little to base future predictions on CasinoFair.

There is some history we can utilize when making an assessment. During the first two years, Bitcoin prices fluctuated below the $1 mark. In February 2011 Bitcoin for the first time reached parity with $1 USD. Following this, there is an interesting progression in the price and eventual drop in value that represents Bitcoin’s first bubble. On June 2nd, 2011 the price was at $10 USD and by June 8th the Bitcoin to USD value capped at $31.91. Within a few days the price dropped back down to around $10 a coin. The price remained under $10 until late 2012.

Some factors could be considered when analyzing the cause of the 2011 bubble. In March and April of 2011 exchange markets opened to sell Bitcoin in British pounds, Brazilian Reals and Polish złoty. Not only this, TIME did an article on Bitcoin in April of 2011. New exchange markets will increase demand as will media attention. These factors, among others, could have easily increased demand consequently increasing value.

This is the history that we have. Can this even be applied to current increases in market value? This poses a tough question. We do know that prices have steadily increased through all of 2013. Unlike the previous bubble, prices haven’t tripled in less than a week only to shoot back down. The increases in value have been a consistent slope. The most prominent change has been the relative increased scarcity in the currency supply. In the latter half of November 2012 the first halving happened, in which the coin-base reward per block went from 50 BTC to 25 BTC. The decreased amount of currency released coupled with hoarding could be one factor leading to increased value.

There is skepticism with this answer. If the coinbase reward plays a role in scarcity and the scarcity of a thing determines its value, alower coinbase reward would increase the value. It seems like a comfortable conclusion that the coinbase halving has some effect, but to assert that it’s thecause of the entire effect poses difficulty. It is likely that a general increase in demand due to Bitcoin community population growth is playing a role. Liberty Forum 2013, an event located in New Hampshire focused around libertarianism in general, largely focused on the qualities of Bitcoin and featured a Bitcoin ATM. An increase in scarcity from the coinbase reward halving, increases in population usage and a self-feeding bubble could be the reason we are seeing such large increases in value.

Will the $50 USD exchange rate be the culminating point when the bubble fractures? Or is the current phenomenon a small speculative bubble attached to legitimate gains in demand? No matter the current situation, Bitcoin holds a very loyal user base that provides security to the entire market. The primary holders of Bitcoin might dump some amount but most want to hold onto a hoard of their own. Through this large increase in value, and any subsequent loss, currency consumers can rest assured that the overall integrity of Bitcoin will likely persist.

It is overwhelmingly the power utilization of bitcoin mining that adds to the digital currency’s carbon discharges, not the creation and removal of the PCs doing the mining, which represented only 1 percent of the outflows.