The rising trend we are currently following has made very short work of the resistance level I marked yesterday. To me as somebody who has followed the gold and silver markets avidly for the past couple of years it feels slightly surreal. I have been conditioned like a pavlovian dog to expect the price to be slammed every time it reaches a key technical area and with gold and silver it never disapoints.
So why are bitcoins allowed to rise in this age where gold and silver (and lets face it, every market) are ‘managed’? Are bitcoins still under the radar? Have the financial institutions not got a way to suppress their rise yet? Are the ‘powers that be’ arrogantly ignoring this threat to their fiat money system? Or (put your tin foil hat on) Is it conceivable that the so called ‘elites’ actually secretly control bitcoins (or know how they will in future) and want wide adoption to happen so the illusion they have lost control actually allows them to retain control without it being suspected.
In precious metals markets the spot price is largley determined by the futures market where gold and silver are not treated like monetary assets but like commodities. Powerful bullion banks are allowed to create massive short positions with seemingly unlimited funds at their disposal in order to put the price wherever they want. And at the moment they want the price kept low.
But with bitcoins, at the moment, there is no futures market, there is no bitcoins etfs or no reason to replace actual bitcoins with paper certificates saying that someone is storing your bitcoins for you. Maybe this is the reason we are seeing what looks very much like an unmanipulated bull market!
The above chart shows all the data on MtGox (median prices), a bitcoin mania clearly took off in the middle of 2011. The price shot up from a fraction of a dollar per bitcoin up to $30 odd dollars in the space of a couple of months. It is a fact that the bitcoin market is still tiny compared to other markets, this probably means that further mania’s are quite likely, it doesn’r really take a huge amount of money to push the whole market around. <sarc>thats why we need central banks to stabalise price</sarc>. Could this be the start of a new mania? If this current bull run surpasses the old highs, media attention will follow, conceiveably attracting in a whole new herd of bitcoin first time buyers in a positive feedback loop. This chart could quickly go vertical again. I have a sneaky suspicion that bitcoins will get to $100 well before silver does.