Bitcoin Rises Over $500

Tyler Durden's picture

One day before the Senate's digital currency hearing titled "Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies", Bitcoin is largely oblivious to any potential regulatory threats, either at the legislative or the city level, where as reported previously the New York superintendent is in a rush to enforce BitLicenses on businesses that accept BitCoin, and moments ago crossed $500 for the first time ever. Instead, it appears that as we also reported previously, the Chinese Bitcoin craze has reached the parabolic threshold, going so far as making Bitcoin an acceptable payment for real estate, which means that while for the time being Bitcoin becomes the alternative inflation protection medium for hundreds of millions of Chinese, all bets on how high it can get are off.

Intraday chart:

1 Year Chart:

1 Year log chart:


Curious where the demand is coming from? A week ago we showed a handy utility, FiatLeak, which shows where the BitCoin transactions are taking place:


Finally, for those curious what a "fair value" on Bitcoin may be, here is what we presented a week ago, courtesy of Global Macro Investor's Raoul Pal:

So yes: Bitcoin is volatile. Very. That much is clear. But what is not so clear, and perhaps a key reason for this volatility, is just what the fundamental, or intrinsic value of BitCoins is when one strips away the pure euphoric momentum to the upside or downside.

To answer that question, we go to Raoul Pal, head of the Global Macro Investor, and his November 1st recommendation to "Buy Bitcoins"(when BTC was $210 so nearly a 100% return in 1 week) which among other things attempts to "value BTC using a macro framework" or, in other words, the first supply-demand driven fair value assessment of BTC.

His take, and price target, in a nutshell:

A fudge, but not a stupid one


Let’s use a broad guesstimate. One Bitcoin should theoretically be worth 700 ounces of gold or pretty close to $1,000,000, if we adjust existing supply of both to equal eachother.


One BTC is currently worth 0.14 ounces of gold.


That gives BTC an upside of 5000 times to equal the current price of gold, supply adjusted. Clearly, I and everyone else believes that Gold may well be much higher than here in the next 5 to 10 years, thus versus the US Dollar the upside for BTC could be multiples of that.


Now, before you shake your head, simply go back to the chart of Gold versus the US Dollar and just recognise that it has risen 8750% since the 1920s. And just remember that Microsoft rose 61,000% from its IPO to it’s peak.


Considering what we know about the world, I personally believe that Bitcoin may well explode in value as more and more people begin to use it.


If you stuck $5,000 into Bitcoins and each Bitcoin did go up to a gold equivalent of let’s say, only 100 ounces of gold (not the potential fair value of 700), then at current prices your Bitcoin stash would be worth $3.3m.


Now that’s what I call a tail-risk option. It’s either worth zero or it’s worth a truly outstanding amount of money.


I bet you never thought you’d see this in a macro publication. But I’m serious. This just might work.

Read on in the attached pdf below (link)

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Midas's picture

Dollar sinks below .002 BTC!

CH1's picture

I'd prefer slow and steady, but we take what we can get.

Buckaroo Banzai's picture

Looks like the Chinese have found the hammer they are going to use to bludgeon the dollar.

Herd Redirection Committee's picture

So say my bitcoins are worth $700,000  a pop, and my hard drive crashes, what do I do?

Bitcoin is deflationary BECAUSE some people will lose their passwords/hard drives containing their wallets will be wiped.

kushmere's picture

Store your stuff in the cloud, and encrypt it. Its your money, obviously you want to keep it safe. I don't disagree with you though, a better platform for wallet management could making a killing!

fonestar's picture

The best will hopefully be Cody Wilson and Unsystem's "dark wallet".  We need this to go live and not a moment too late.

Frankly, some of the utter bullshit coming out of the mouths of "The Bitcoin Foundation" and Mike Hearn is giving me pause (followed by ire).  These people seem more interested in hob-knobbing with authority and regulatory figures than following the cryptoanarchist roots of Bitcoin and the community.

CH1's picture

I wouldn't even give fiat to the Bitcoin Foundation. Fuck them.

(I hold some hope for Matonis, but he had better show us something soon.)

knukles's picture

Neither pro nor con Bitcoin...

90% of market returns generally happen within the last 10% of the move.

(Just like gold and silver running up to their highs.... kinda like stocks... Oh never mind....)

fonestar's picture that would be a great name for a coin mixing service!

jbvtme's picture

can anyone recommend some bitcoin mining equities?

jbvtme's picture

i know you can exchange bitcoins for currency and gold.  how about tulips?

smlbizman's picture

someone tell me how to buy and sell, in laymens terms ...i understand the bitcoins..if i could set up a td account, make a sell when howeasy is it...because the mechanics of the transactions are what have stopped me so far...i even set up a mt.gox account 3 mos ago...and never went im for taking a risk...i just dont know how.....anyone?

fonestar's picture


Let me know if you need any help.

smlbizman's picture

thanks fone...and all others...i will digest tommorow and make a move this week...and i will take u up on ur offer to help..thanks tons...

fonestar's picture

Just like eBay, stick with sellers that have 100% rep and follow the seller's instructions *exactly* or you can wind up being on the phone with your bank for a long time.

TheHound73's picture

If you are USA based, is pretty easy (but requires KYC authentication)

The Abstraction of Justice's picture

1st - ensure your computer is virus free. Do a virus scan. Not Mcafee, that is NSA controlled.


2nd - install bitcoin software from It takes a few hours to syncrhonize.

3rd - you need to think long and hard about a wallet password. Something you will NEVER forget and something nobody will ever guess. Try a command phrase, and do not mistype it!


Register with an exchange. I use takes a few days to verify your account.


Try buying a very small amount to get the hang of things. Some exchanges require you send the bitcoin seller a bank transfer. So electronic banking is almost essential.

When your account is credited, you use your wallet software to generate a receiving address.

You need to know how to Copy and Paste that address from the wallet to your browser.

In the exchange website tell it your receive address, and set the small amount of test coins to that account.


When you get everything working try buying in quantities you need. For beginners break up the purchase into a number of smaller transactions, so if one fails you dont lose everything.


Bitcoin is quite involved. If you have figured out how to bank online, then bitcoin is about 4x more involved.

Skin666's picture

Have a look at

TheHound73's picture

@jbvtme  Havelock Investments offers some mining equities (AM1 and AM100).  Note that the shares are purchased and priced in BTC.

bunzbunzbunz's picture

Yeah, I'd say it's a good run when a site like can give out .000006 BTC and generate interest and traffic to the site..obviously just to generate ad revenue - but hey it drives and encourages the demand. As long as that keeps up, BTC will continue rolling.

fonestar's picture

I do not know where the price of Bitcoin is going (nor do I really care).  But I will predict this much... so long as governments believe they can control Bitcoin, Bitcoin will continue to make huge gains against national currencies.  Once governments move onto the accepting stage of Bitcoin, they will have to compete against Bitcoin.  That could mean issuing debt-free currency, letting banks fail or even tying their own currency to Bitcoin's creation.

Xibalba's picture

It proves how manipulated the Gold and Silver 'markets' are.

fonestar's picture

That's right.  People holding silver should do just fine in the long run (gold I am not as sure?).  If we accept that these markets are all just fake propaganda (like the "news") we can move beyond a place of fear and start to make better decisions about how to interpret and react to the situation we find ourselves presented with.

Running On Bingo Fuel's picture

Let's play connect the dots, shall we?

Look carefully at the size of the cooling system and the liquid nitrogen silos

And if you can stomach it:

bitCon is the ultimate ponzi fraud.


CPL's picture

Again...quantum can't break the hash functions.  That's Math.  Period.  It's a mathematical property of the situation.  Quantum computers are built to extend resources, not computing power....yet.  So the hypothesis is completely wrong.  For Quantum computing it's being developed for one thing right now. 

Bandwidth capacity.  Both for hard drives and network data bandwidth.  In your statement, you are telling us that a bigger hard drive is going to crack a hash function. 

In turn I'm offering you a bridge in Brooklyn for a banana peel.  I couldn't tell you which one happens first because it'll never happen.

Running On Bingo Fuel's picture

Obviously you don't get it.

In the past year or so, it has come to be a known fact in Bitcoin technical circles that Bitcoin, in its current form, is partially quantum-safe.


fonestar's picture

You need to ask for a new FUD list from master because the one you've got is getting old.  Either that or go back to designing your quantum computer....

Running On Bingo Fuel's picture

Read it and weep pornstar.

You're too easy. I thought this was Fight Club? Cryptologists should stay away from fight clubs. Bitch.


fonestar's picture

Haha.. I just bought some more BTC today.  Theoretically, someday inter-stellar travel may be possible too.

Keep trying loser.

CPL's picture

Yeah that is a problem.

The same way if I put a sticker over the address of an envelope and change the direction of it.  But first stopped to de crypt only the public part of the currency, it's still stamped with the private key.  

...carrying on.  After I've sat and cracked the country code to an address for 18 years (yeah, it'll take a while to crack for a single BtC) and a password you've generated to allow that BtC to be marked as spent.  I'm not sure what you read, or your comprehension level here of the technology.  But the crypto aspect of it is tighter than a ducks ass.

The same flaws in our current system exist in that one physically as they do technologically now.  Except it's a top end limit without a lever glued to someone's hand at the number 21 million and it's very specialized and expensive.  This in a world without credit.  Because that's the bitcoin universe.  You have to have some to participate.  To do that, you have to mine it or buy it on your own or charge for it.

Running On Bingo Fuel's picture

Your troupe of bitCon monkey's love to create a baffling technical spin job.

If you cannot dazzle them with brilliance, baffle them with bullshit.

YOU WIN! (you and pornstar)


CPL's picture

When you want to join the rest of the planet, BtC...not a single paper currency will be waiting because we'll all just agree to get up and walk away from the demented crap.  One by one, poof, then we've all moved away and you can be angry where ever you skulk.. 

So sulk about the math and technology opportunities to make something everyone can use all you want.  See you on the otherside of the wall sparky, you can chase that mirage into the desert forever if you like. I would rather you came along for the ride.  Takes all sorts.  Even angry pricks.

Running On Bingo Fuel's picture

So I buy bitCons today, and they will hit a shitstorm tomorrow?

Nice marketing campaign.

When TBCHTF (the bitCon hits the fan), the exit door is 2ft x 2ft and NO ONE will get through back to safety.

Good luck turning you fantasy Coins into real value.

"but, but, butt ZH told me I could buy a house with my vaporware".


BitStorm's picture

Idiot returns to spread more stupid....

fonestar's picture

+1.  Satoshi's creation doesn't need these PR goons going around claiming to represent the Bitcoin community.  All of this talk about marking coins and "redlists"?  Hearn's Google ties may be a case of attempt at "controlled opposition" or their attempt to turn Bitcoin into another shitty Google App.  Bitcoin's best PR is to simply ignore the establishment.

In any case, they can have fun if they want.  They can even fork for all I care because the rest of us will just ignore them and their new Govcoin.

I'd rather have my principles than a six inch sub.

dick cheneys ghost's picture

Satoshi............this guy needs to come out of the closet..........

fonestar's picture

Why?  So they can kill him?  Or so everyone can blame him when his code causes a deflationary blackhole that destroys everyone's life?

dick cheneys ghost's picture

invisable coins..........why didnt I think of that!!

fonestar's picture

Pretty much everything that exists, exists outside the spectrum of visible light.  What is your point?


CheapBastard's picture

"If you don't hold it, you don't own it."

fonestar's picture

....and if you can hold it a guy with more guns than you can hold it too.

James_Cole's picture

I don't know why you bother arguing with these people. A run from 5$ to 500$ and they still say us btc folks are wrong?? Comedy gold!

Even if it somehow cratered to 10$, so fucking what?

fonestar's picture

I'm hoping for a correction back to $300 level but I am not sure we will get it.  I don't know how much of this is pure speculation, ATMs coming online or China?

The ATMs are great though because most of those people are just trying it out and a lot of those coins may go missing forever.

AgShaman's picture

I am hoping you lose yer wallet.....


and I "find" it

fonestar's picture

What's your email?  I can send it to you right now....  you still will not have my private keys.