Everything you decide on is a Gamble.

I also realized that everyone is a beger.  From the guys on wall street (recently on hbo Bretton James (represends Jamie Dimon of Chase) mentions his tin cup at a fund raiser), and politicians, to the girls on the stripper pole, to the person in the cubicle, factory, or park, or to the guy on the street corner with the cardboard sign.  It just depends on how they beg and how much they can get for it.

Just like everyone gets upset with oil speculators for the high price of gas.

They would not be complaining if tomorrow a huge oil find was made with 10 billion gallons of oil available and the price dropped. But why would the price drop on such a find when it would take 10 years to get started on tapping that oil? Because speculators see how things will play out in the long run and they invest in those thoughts.

Also, the BitCoin has not been very volatile. It has hovered around $14 for the past few days with only a slight deviation.

From what I can tell, the fact that MtGox has users commission set to 0% means that there are a lot of people buying small amounts and selling those small amounts when there is a minor deviation making a couple of bucks here and there. This is why there has been no major swings. Everyone is fine with taking little bits of coin.

When the 25 days is up, July 26, the trade cost will go up and people will hunker down with their bitcoins again and wait. That is when we will go back to business as usual and the price will slowly rise again as new people put their money in and do the same.

But I am just speculating.

This may be true in whatever other markets exists currently  that are connected  to REAL WORLD supply and demand and companies... But bitcoin is an entirely new concept. It is NOT connected to anything else right now besides the speculating.

That makes it a gambling game and none of the posts so far have any basis in reality. There is no way you can say the speculator vs speculator trading right now is not the cause of the volatility. there is NOTHING else effecting its price.


IF somehow in the future there is alot of easy to buy things with set bitcoin prices (not fluctuating wildly based on its exchange rate) THEN and only then would you be able to say things like "speculation might not be the only driving factor in its volatility."

Greed is coloring many Bitcoin supporter's perceptions.  They think "wow, if Bitcoin went up to $200 next week, I'd make a ton of money!  So that's obviously a good thing!"  They're forgetting that Bitcoin was originally intended to be a currency, not a get-rich-quick scheme. 

Speculation is fine for commodities, because it helps the market determine the price.  It's terrible for fledgling currencies.  There's a reason that new currencies have traditionally been backed by something else (gold, other established currency, etc.):  you want people comfortable that the value is based on something other than people's perceptions and you won't get screwed if you hold on to them in exchange for goods and services.  Otherwise, why would anybody use the new currency?  This problem is magnified tenfold for Bitcoin, since it's not backed by any institution and has a much higher barrier to entry for the casual user than little slips of paper with numbers and pictures of dead people on them. 

I suspect Bitcoin will provide some useful lessons for the next cryptocurrency, but that's about it.

nothing wrong with it, speculators provide liquidity

I think the perception is that the 'speculators' don't have any interest or love for bitcoin at all, and they don't understand any bitcoin fundamentals.  They just see it as a get-rich-quick scheme.  Like beanie-babies, or pogs, or (I can't believe I'm bringing this up) tulips.

If that's the case, as the theory goes, then the speculators don't really add to the core bitcoin value, since they're not treating it like a currency or a commodity, they're treating it as FREE MONEY.   When the party is over they'll start stop-lossing, driving the price down, potentially enough to destroy the entire bitcoin system.

That's where I think the hate comes from.

P.S.  I do not subscribe to this theory.

Speculators are just people who risk their own money on ventures, as opposed to politicians who risk other peoples' money. Not surprisingly, the latter is constantly demonizing the former.

The world would do well with more speculators, and fewer politicians.