I have been out of bitcoin for a while though I still hold a nice five figures amount of it that inflated as of late (even despite the massive drop).
It's interesting how many supposedly smart people carry on to be in denial about it here. Despite it going from 0 to 1 to 100 to 1000 to 10000 to 20000.
I'd put my name on the line and say that bitcoin is going to be worth more than 50,000 in the future. And if you open my brain, I'd say it is in the near future (ie: 2018).
Yes Bitcoin is mass hysteria. Bitcoin is a bubble. But so if your life. You go from 0 to prowess and then you slowly die or violently cease to exist. By that definition your own existence is also a bubble.
People die but mania doesn't. Bitcoin is here to stay. I find it difficult to be replaced by an altcoin. A better technology? maybe. But all these altcoins are the same concept and just changing a few things here or there. Or (as many of them) plain scams.
Yes, each person's life may be a bubble and yet "life" goes on. But by that logic, Bitcoin is now over the hill and heading to death. Aging bitcoin will go to zero and be replaced by a different mania just as each aging person dies and is replaced by a different person.
How often do bubbles strike the exact same asset twice? Once bitten, twice shy makes it really hard for an old bubble to re-inflate. I'm still waiting for tulips to top their previous high mark in price.
The issue seems particularly problematic for a currency that is backed by no one and nothing. All bitcoin owners have is the hope that some future person will want bitcoin because that future person hopes that another further future person will want bitcoin because.......
That's not what I meant. Bitcoin bubble is not tied to price cycles but rather to another technology that completely disrupts finance. Bitcoin just began to disrupt finance. I can hardly see how something else could come and replace it. It has yet to go through the top and topple the financial system.
I used to be in denial about bitcoin prowess until I found out how effective it is. The decentralized nature makes it attractive to lots of people. The tax evasion and money laundering businesses are huge. It's only a matter of time before the new wealth learn how to leverage bitcoin for their own advantage.
We have a long way to go. The current small cyclic bubbles are good because they introduce people to crypto. They get an introduction of the possiblities, get burned in trading and quit. But some of them might return later for real needs.
Don't get me wrong. I think blockchain technology for financial and other transactions will make a big impact. I doubt it will be disruptive, though, because it's openness ensures that today's dominant players can openly adopt/co-opt the system. But BitCoin, itself, was badly designed from the start and seems stuck with it's architecture mistakes unless they can do a yuge hard fork.
The transaction cost structure of BitCoin sucks. The transaction flow rate of BitCoin sucks. The volatility of BitCoin makes it terrible for a medium of exchange and horribly risky for store of value. BitCoin's inability to repudiate transactions may be its greatest strength but it's also its greatest weakness (that alone will mean it will never replace credit cards). It's use for tax evasion, money laundering, illicit drug transactions, and other crimes make BitCoin a growing target of regulators who may throw the baby out with the bath water.
BitCoin is the MySpace of cryptocurrencies -- the dominant example of a promising new technology category in the early years but not likely to be around as the technology matures.