Bitcoin Price Breaks $15.4 August 2012 High BTC Price Today $16,598.00

I wanted to repost this article from 2012 about bitcoin. I Feel Like bitcoin is Going to Blow past 20,000 Soon and this article is my motivation. No one would of thought that at 15$ bitcoin would ever get any where near 10,000. Now Look Here we are at 16,000 and a Run to 20,000 does not seem too Far Off....

The Bitcoin price has just broken through the $15.4 high that it last set in August, making today’s maximum of $15.68 at the time of this writing the highest that the Bitcoin price has been since July 6, 2011. The spike follows a roughly two-week-long rise that has been bringing the price up by an average of about 10 cents per day since roughly January 7, turning the rally into an all-out buying rush as the price battered for two hours, and finally broke through, the psychological barrier of $15. The near-term cause of the sudden increase was the Coming of Age Day, a banking holiday in Japan which caused deposits in the Japan-based MtGox to get delayed until today. Once the deposits processed on Tuesday, Fred Ehrsam argues, all those who deposited fiat into MtGox to buy bitcoins over the weekend were finally able to do so all at once, breaking the steady trendline at $14.2 and causing the price to shoot up precipitously over the next two days.

Unlike some of the previous spikes that the Bitcoin price has seen over the years, this rally appears to be well supported by the underlying fundamentals. Google Trends volume, a commonly used statistic to gauge public interest in Bitcoin, is roughly stable, but over the past few months one can notice a distinct trend toward Bitcoin’s score increasing. However, it should be noted that the Google Trends volume, although it used to be extremely well-correlated with the Bitcoin price, has diverged considerably in recent months, to the point of only slightly tracking Bitcoin price movements since August. Thus, there is reason to believe that the slow and unpredictable rate at which this statistic is rising should not be taken as an argument against Bitcoin’s short-term and medium-term future.

Other statistics weigh even more heavily in Bitcoin’s favor. Here are some charts from blockchain.info showing the number of unique addresses and the number of transactions per day:

These figures, which attempt to measure Bitcoin’s actual usage rather than public opinion or interest in the currency as search volume and all market statistics inevitably do, show the same pattern: the values rose during summer 2012, dropped off in the fall, but then began to quickly pick up again in November after WordPress started accepting the currency. Now, the values are all roughly at the same levels as their August 2012 highs, and are likely to go even higher.

Even more positive are the statistics for the online wallet service operated by blockchain.info itself. The site’s transaction volume and number of transactions per day have been consistently going up throughout 2012, even remaining roughly horizontal while the Bitcoin network statistics and price were going down in September and October. The number of users, however, is especially surprising:

For most of the year it was the simple, roughly quadratic curve that one might expect from a steadily growing service. In December, however, shortly after Bitcoin Centralannounced its deal with a payment services provider in France, a sudden and fundamental shift happened. For a few days, Blockchain’s number of users very nearly went vertical, and it has since continued to grow at over twice the rate that it did previously.

The reasons for the rise are plenty. The price started to move up from a low of $10-$11 after WordPress, ranked by Alexa as the 21st most popular site in the world, started to accept Bitcoin for payment in November. Soon after that, we saw the Bitcoin Central deal take place, which significantly changed Bitcoin’s reputation for the better in an instant. A flood of online articles on the subject arose, all with the same message: Bitcoin is now going mainstream. Since then, we have seen Bitcoin gambling hit the mainstream media, and articles continuing to report on Bitcoin as a whole, including an article by Canada’s MacLeans which wrote in its headline that “the cold, hard cash of the Internet has seen dramatic growth recently, and shows no signs of slowing down.” Bitcoin business is continuing to grow; BitPay’s Tony Gallippi reports that since WordPress started to accept Bitcoin the company has increased its number of merchants by over 50% and now stands at over 2100. Very recently, the company also raised a sum of $510,000 from a number of moderately well-known Silicon Valley investors. The negative attention that Bitcoin had been receiving in the fall following the collapse of Pirateat40’s Ponzi scheme and the Global Bitcoin Stock Exchange has since subsided, and Bitcoin has seen no significant troubles since. The currency is now in a better position to start truly hitting mainstream adoption that it ever was.

From here, it is still a long road until Bitcoin breaks the all-time high of $31.91 that its price reached in June 2011. However, logarithmically speaking, Bitcoin has already covered nearly three quarters of the distance since its post-peak low of $1.994 in November 2011. The 14-day average is also now as high as it ever was, and may well go even higher. In the next few days, a return to the more steady trendline that is now in the $14-$15 range is likely, but if all goes well in the medium term that price is well poised to go even higher.