I Didn't See This Coming

Okay, I will admit, I didn't see this coming, and it's cost me a few dollars.

When you're as much of a Bitcoin advocate as I am, it can be difficult to understand why others don't feel the same way, and when those others put their money where their mouths are, you get the above chart.

FreeTrade nailed it in his "Mappers vs Packers" post. A lot of "Packers" are not seeing Bitcoin's potential, it's raison d'être, and they're bailing because they think Bitcoin's value will drop to something considerably less that what it can be sold for today.

Meanwhile, the Bitcoin economy continues to grow, and difficulty has barely budged relative to the price drop - miners continue to mine.

If you've been reading this blog for a while, you know I'm more concerned with the long-term potential of Bitcoin, but my blog is called "Bitcoin Trader," so I feel obligated to comment on the short-term price changes.

Are we going lower? Maybe, but there just isn't that much lower we can go. At the end of the day, there is a limit on the number of Bitcoins that will ever exist, and so as long as the Bitcoin economy continues growing, which it is, each Bitcoin will increase in value. Is the entire Bitcoin economy and its perceived potential worth less than $21 million USD, or less than $1 per Bitcoin? No chance in hell - no way.

We're talking about a new paradigm for the way money is moved around the world. Is that worth less than a company that makes little plastic shoes? Well, at the moment of this post, all 21 million Bitcoins would apparently be worth 1/22nd of that company. If the ground-breaking, mind-blowing, change-the-world potential of Bitcoin was worth the same as plastic (okay, I'll admit they're pretty comfortable) shoes, all 21 million of them would be worth $108.10 USD each.

I don't know what's going on with this valuation under $4 per Bitcoin. I definitely didn't see this coming, but I will be buying many many more at these prices, and I doubt I'll be the only one.

Posted in: bitcoin value,potential,trading,volatility