Bitcoin Breaks the Ten Dollar Barrier
As of 18:36:30 GMT on August 2nd, Bitcoin broke the $10 price barrier on MtGox for the first time in 2012. Bitcoin closed at $9.35 at the end of the day on July 31st, and, as of 1:54 GMT August 3rd, is currently trading at $10.65, indicating a rise of almost 14% in just two days. The trading price hit a new 2012 high of $11.00 around 22:00 GMT.
Some are suspicious of the recent run-up in price over the last two months, anddo not believe it will last. The price at the start of 2012 was only $4.72, and, with the current trade price of $10.65, shows a whopping gain of 126% over eight months. Most of that gain was only seen over the most recent two months – June and July – of 2012, amid concerns that this is yet another bubble-based rally, with the potential for a mirroring of theboom and bust of the summer of 2011.
Others are more optimistic, giving reasonable explanations for the rally, such as the potential that investors with high net-worth are beginning to invest significant funds into bitcoins, or conducting market trend analysis to legitimize the price increase. The lack of increased activity shown on Google Trends also helps bring security to the idea that the current rally is sustainable, and not a bubble. An increase in Google Trends activity tends to indicate hype, and a rally without hype might indicate a rally with legs to stand on, instead of a rally built on a group of get-rich-quick speculators.
While it is certainly impossible to predict the future price of bitcoins, the steady 3-month rally with every week ending at a higher price than the last does seem to bode well for those who believe the rally is sustainable and will continue.
[UPDATE]: As of 8:00 PM GMT on August 3rd, Bitcoin is trading at $11.08, continuing the rally with a rise in price of 18.5% in less than 3 days.
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