Bitcoin - large price increase

I've been following Bitcoin since June 2011. You might be interested in my Bitcoin trading thread. Recently the Bitcoin price has soared to $700 which is a two year high. Most notably in the past three weeks it went from $450 to $700.

While making some very stupid mistakes (shorting a Litecoin bubble)) and losing money shorting a badly designed mining contract (Bitfinex TH1) that was overpriced but designed in such a way that it had value because it was going to lose its value (eg. it was worth 1 million dollars on the last day, because someone would pay $999,999-$1 million dollars to short it down to zero -- even though its mining value was zero), I'm now doing very well due to the price increase.

In 25 days, Bitcoin mining reward is going to halve - from 25 bitcoins to 12.5. So this is probably behind the great price increase. I tend to prefer looking at fundamentals. This is very tricky as Bitcoin doesn't have profits like a regular company. So you need to look at the ecosystem of businesses, users, regulation, news stories, and bitcoin core software development. In general, the fundamentals are doing ok - but there are major hurdles to Bitcoin's success including an inability to scale (eg. do lots of transactions), a lack of use cases other than speculation, conflict within the community over the block chain size (primarily related to the ability to handle lots of transactions, and the competing interests of miners (and Chinese miners vs non-Chinese miners), investors, and businesses).

The competition to Bitcoin is not doing as well as Bitcoin. The most recent competitor is Ethereum which has some nice ideas behind it but not much of a track record for accomplishing anything. They have recently launched "The Digital Autonomous Organization" with great controversy as to whether it is a good idea. In practice most Bitcoin businesses that issued shares in BTC have turned out very bad, so I'm pretty skeptical about "The DAO". Ethereum's value has gone up a lot - and that is always a time to be cautious.