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Comment by jussij | Hacker News Reader

If you look at the 6 month chart it's fairly obvious there's something unsustainable going on.

Bitcoin can't stay cheap forever, either more people use it and it has to gain value (because its so small at the moment) or people stop using it and the value ends at 0.

Those are your two options. Grow until the Bitcoin economy is worth some 10 Billion at least, or it'll be evidently dead and close to 0.

Its much more unlikely Bitcoins will stay around $20 - $60 for the next 5 years. (Although still possible)

I have no idea what variables you are using, or how you are reasoning that bitcoins somehow are 'cheap' at a certain price.

Using the only scale we have available (history) $40+ per BTC is VASTLY overpriced considering the previous historical fair market value.

What makes you confident that you know that the current price is "VASTLY" above the "fair market value?" I thought that markets determine fair market values--which is exactly what's happening at the exchanges.

Of course, but with a young currency without a set 'backing' (Gold, merchandise etc) I am just saying that looking at historical valuation makes it seem like the massive value increase would speak for it being valued fairly high @ $40

More people are using it. Economics 101.

I prob wouldn't mix the term 'Economics 101' with a early adopter currency that has fluctuated between $0.001 and $50 in less than 5 years and between $5 and $50 in the last 10 months.

True, but supply and demand still apply in an all online currency.

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