Category Archive: Analysis

Four charts that suggest Bitcoin value could be at 10,000 USD next year

(CryptoCoinsNews) Has the Bitcoin Value
bubble burst? Looking at the most recent prices, we seem readier for a
gentle nosedive than a new rollercoaster ride to the top. Many altcoins
are heading down too: Litecoin, Peercoin and your beloved Dogecoin
are all in a steady slide to the drain of the cryptocurrency world. But
looking at the charts below, many would argue that Bitcoin is up for a
new rise to 10,000 USD. This recent bubble wasn’t the first bubble, and
it won’t be the last for Bitcoin.
Bitcoin price chart in USD
Bitcoin price in USD from begin 2013 to June 2014.
You see that tiny top in April 2013? That was a bubble just like the
most recent big one. It was playing out on a lower price level, but the
percentage rise was equally big. There have been more bubbles in
markets ever since markets were invented. All start with a slow rise in
price, then a parabolic jump to the top, and the inevitable crash and
rebound. At the end of every bitcoin bubble, the value is about 2x
higher than what it was. Every time.
To see this trend in action, we have to display the price on a
logarithmic scale. This is useful for values that grow exponentially.
The chart below shows us the Bitcoin/USD value over the same 2013-2104
period on a logarithmic scale.
Long-term Bitcoin price in USD (logarithmic scale)
Bitcoin price chart in USD on a logarithmic scale.
This is the very same chart, but on a different scale. You can see
exponential growth, more or less stable over the years. In 2012 the
price grew from $5 to $13. In 2013 from $13 to $800. If we make a
similar jump in 2014, we come to the (crazy) price of 10,000 per bitcoin. For this the value only has to continue its trend. Following the full 2012-2014 chart on bitcoinwisdom,
one can see continious valleys followed by spikes. We are currently in a
valley, which is very good news. What will be the value in 2015? The chart below takes an educated guess:
Bitcoin price prediction for 2015
Bitcoin price prediction for 2015

Google Trends on Bitcoin

The fact that we are in a valley is confirmed by Google. Google
trends shows us how popular a keyword is. It tracks the number of
searches for ‘Bitcoin’ and other keywords, and displays that in a graph
over time. The resulting chart of user interest shows peaks and valleys
corresponding in time with the peaks of the price, as can be seen in the
excellent research in this forum post.
Google searches for 'Bitcoin' chart
Google searches for ‘Bitcoin’
Does this mean more user interest increases the price? Or does a
higher price generate more user interest? We can’t be sure, but it is
clear that they go well together. We are currently in a valley of user
interest, which means another top is in the make. Bitcoin news is
widespread, but how many people do you know that own one? According to wallet counts, the number of current Bitcoin users has hardly reached more than one million yet. Bitcoin is at it’s very infancy.

“Bitcoin is still in the earliest phases of industry
development. The first years of Bitcoin were about building the
infrastructure. Bitcoin entrepreneurs were busy setting up the most
basic but fundamental aspects, including wallet and mining services.
Today, Bitcoin is just starting to enter the investment phase, where
venture capitalist, hedge funds and other financial firms are starting
to invest money and capital into this nascent technology. Bitcoin isn’t
quite ready for the consumer phase, where end users begin to utilize the
services. If the entire history of Bitcoin was a clock, we’re still in
the very early time. I would say were maybe in the second second of the
entire history.” Nicholas Cary, CEO of (source)

The next jump in price could be ignited by the Winklevoss brothers bringing Bitcoin to the Nasdaq, or by the SecondMarket Bitcoin Investment Trust handing
over Wall Street dollars. But wherever it comes from, the charts are
definitely bullish. My advice is simple. Buy now, and wait.

Disclaimer: The (funny) definition of an economist is “Someone that can use economic theory today to explain why he got all his predictions wrong yesterday“. The market is unpredictable and I can’t always be right

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bitcoin sweden

Swedish central bank acknowledges benefits of cryptocurrencies

(CoinDesk) Sveriges Riksbank, Sweden’s central bank, has published a brief
economic commentary on the impact of digital currencies on the retail
payments market.
The document outlines the basics behind digital
currencies and focuses on bitcoin, but it also mentions some altcoins
such as litecoin and dogecoin.
Aside from a relatively basic introduction to digital currencies and background information for novices, the document also sheds light on the state of bitcoin in Sweden and the bank’s attitude towards bitcoin and other cryptocurrencies.

Take-up remains limited

The Sveriges Riksbank
report found that the use of digital currencies in Sweden remains very
limited. The authors point out that it is particularly difficult to
obtain accurate information on the use of digital currencies in
different countries, hence most analyses are usually limited to the
total issue value and global usage.
The report tries to isolate
Sweden and examine transactions limited to Swedish krona (SEK)
exchanges. Even so, the data may not be complete, as it only deals with
transactions involving SEK.
“On average, around 212 bitcoins per
day were converted to or from SEK during the period December 2012 to May
2014 at an average value of just over SEK 266,000. However, the daily
value varied substantially, between SEK 2,500 and SEK 2.5 million,
depending on the exchange rate and the number of bitcoins exchanged,”
the report notes.
The authors caution that the statistics are
incomplete, as there is no data on transactions between private persons
and other movements of funds that could be relevant. Therefore, they
concede, the exchange statistics may underestimate the use of bitcoin in
However, the report concludes that the values involved in
cryptocurrency transactions pale in comparison to traditional
transactions. This is how bitcoin stacks up:

make daily payments using cards and cash totalling 8 million in volume
and to a total value of over SEK 3 billion. Even if the use of bitcoin
in Sweden were to be much larger than the average exchange value of just
over SEK 266,000, this is a relatively low value in relation to other
types of payment. At present, there only seem to be around 25 swedish
companies accepting Bitcoin.”

Risky but innovative

the report contains the usual set of caveats found in most central bank
statements involving digital currencies, it also includes some
relatively positive commentary.
The report states that digital
currencies are one of many innovations in the Swedish payments market
and like other innovations, digital currency is essentially positive:

can contribute to meeting new payment needs and to making payments
cheaper and more secure. Those who choose to use a particular payment
service can be expected to do so because it gives them an added value in
relation to other payment services. This also applies to virtual
currencies, which can for instance make some cross-border payments
simpler, faster and cheaper. Another advantage is if the payer does not
need to share sensitive information, such as card number or bank account
number, with the payee.”

Cryptocurrencies may also be better suited for micropayments made via websites, the report further notes.
associated with digital currency platforms include lack of clear
regulation, lack of consumer protection regulation, volatility, security
risks and the risk of using digital currencies for illicit
The report concludes that the impact of any
innovation depends on how much it is used. The use of digital currencies
is “very limited” both in terms of the number of users, the number of
transactions and the value involved in said transactions.
Therefore both the positive and negative effects of digital currencies on the payment market in Sweden are currently negligible.

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