free spirit
more tea vicar?
speculation - it's a blatant financial bubble being pumped up by speculators owning a huge proportion of the bitcoins who'll probably then cash out at some stage leaving those not in the loop trying desperately to work out where their money has gone.
http://eprint.iacr.org/2012/584.pdf
There seems to be a bit of controversy about the exact numbers involved here, but it at least roughly illustrates the idea that a relatively tiny proportion of all holders of Bit Coins hold more of them than the other 2.3 million ish combined.
If you're sitting on several million / tens of millions / hundreds of millions of dollars worth of an asset that's gone up in value a factor of 10 in the last year, or a factor of 100 in the last 2 years and you know to be highly vulnerable to a massive price crash, then basically you're playing a very high stakes game of poker with the other big holders of the asset whereby they can all continue to sit on their holdings and build up the price some more, or maybe even dribble them out gradually so as not to impact on the price too much.... but they all know that any one of them has the ability to cash out at any point, and in doing so to likely trigger a crash of such epic proportions that they'll either have to accept the loss of most of their bitcoin value, or take the ultimate gamble and attempt to reverse the crash by buying as much of the bitcoins being sold as possible.
As long as they all play the long game it'll be ok, but as soon as one of them cashes out, it becomes a double or quits situation for the rest, and if more of them decide to dump them than decided to buy, then the bubble would burst potentially to the point where it never recovers.
There is an alternative possibility that the demand globally will be big enough to enable these big holders to gradually wind down their exposure while allowing prices to continue to rise, and enough new investors with enough money behind them enter the market to water down the potential for that small number of large holders to cause complete meltdown by cashing out. I suspect this is what these big holders will now be attempting, but it's going to be a difficult trick to manage when any one of them could throw a massive spanner in the works at any time.
for previous historic examples of similar bubbles, see for example, the tulip bubble of 1634-37. Things are obviously a bit different now, but the basic potential of the situation remain the same.
