Bitcoin Stats: Three-Quarters of All Bitcoins Are Hoarded, Not CirculatingOctober 18, 2012 3:39 pm
Well if the price of any commodity keeps going up, with supply being an issue, one primary candidate to suspect is hoarding. The funny thing is, this happens in the digital world as well. We have been spotting multiple bitcoin stats – we spotted an amazing stat today, that effectively summarizes the issue with the rising cost of bitcoins – most of them are not in circulation at all (Source)
Currency = Trust + Acceptance. One drives the other. BTC needs to crack this loop to become mainstream. It is an uphill battle till then.
This story of hoarding stuff to increase the demand and hence the price – has been tried before, and has always ended badly. The forces of Supply and Demand have to work freely for the price discovery process to function. With Bitcoins, based on stats like the above, we have a scenario where the price discovery process is not very functional.