on january 1 last year one bitcoin was worth $1300 today it's worth over $19,000
of course there are no guarantees with anything (especially bitcoin!) in another year it could be worth a million dollars or it could be worth ten bucks
Sure, I can read the news as well. But what do you reckon' is fuelling the bubble? It's no longer of any real use as a currency, as it once was due to it's volatility, though in years to come that could very well change.
So it's only got two real uses ATM as far as I can see, and that is as a speculative instrument, or as a storage of wealth, more likely a combination of the two.
The risk there is that as a speculative instrument, it's value is an illusion created by those that believe it has value. if sentiment turns negative there are no underlying fundamentals to stop it free falling. However I will concede that at this point it would seem there is no margin lending to speak of, which means true believers don't have to sell on the downside, I'd be very f**king wary should the investment banks start margin lending on crypto directly or crypto futures. There's no way the market could endure the kind of volatility we've seen if there's margin calls on significant holdings.
Which is where being a storage of wealth comes into it, that gives it some form of intrinsic value, it also may well be what is pushing the price ever upwards, that the price is rising tells you that there are more people willing to buy than there are those willing to sell, what we don't know however is who is buying it and who is holding it and why. Such is it's nature.
The anonymity of holding, in my opinion, and it's only an opinion, is what is making it so attractive as a store of wealth, and that for mine leads to some vexing questions about the kind of money that's entering the market, which means that there is an inherit risk of government interference tanking the market.
Lastly though, and probably most relevant to this discussion, is that there is no doubt this is a bubble, and history tells us all bubbles burst, and the later you enter an inflated market the higher the risk. Good on Avenger for picking it relatively early, because by the time every man and is dog is jumping on the bandwagon, it's more often than not too late.
Anyway's that's my two cents on it, I'm a cautious investor because I value the money I have worked hard to make, which means I'll likely never make a killing, but I'll just as likely never lose a whole lot either.
