If your neighbor did not buy bitcoin, that’s must be strange, right!? There is a real Bitcoin mania out there in the moment and it looks like there is no end of Bitcoin price growth. I have so many questions lately like, why the Bitcoin price is going up so fast almost every day? Should I buy a Bitcoin, is it too late? Is it true that the Bitcoin will reach a $100,000? Etc…
Well, from my perspective, I have several meaningful answers on those questions. At first, the most important one. The price is going up sharply because everyone talks about it, everyone writes about it and because of that everyone want’s to buy it! That’s the main reason why the price is going up sharply. I mean, no matter what the ‘experts’ says, in my point of view, the price is not going up because there is a limited supply of bitcoins. There was a limited supply years ago and noone wants to buy it then, right!?
There is only one reason and that’s the great demand at the moment. As before mentioned hysteria, everyone is buying bitcoin because they think the price will go up furder, as each new buyer think that more people will want to buy it and because of that they believe that the bitcoin will go up in price furder more. As I have the info, more than 6,000 new investors are opening their account on the Bitcoin exchanges every day lately, which has an obviuos effect on current price. Is this price of $16,000/$17,000 a bubble? For sure it is, but as every bubble, it could be bigger and that’s why the price could go up more. How much more? Until the bubble bursts. It’s could be $16,000 or (I doubt) $30,000, maybe $50,000, nobody can predict that.
No matter what others says, I don’t see any fundamental, or any other background for this latest developments. You simply can’t calculate the value of bitcoin. It’s valuable for sure, but in my view it’s far bellow from this current price of aprox $16,000. Maybe you will say that I am crazy, but if I had to determine ‘the value’ of bitcoin, I would set it somewhere between $500 and $1,000 at most. Btw. there is so many issues what can disrupt the future of the cryptocurrencies and nobody can prevent the possible failure and possible fall to even a zero, what I don’t believe in, but… I mean, nobody can fight against the banks, the real currencies, no matter the possible valuable blockchain technology. It’s simply impossible to go against the giants. But, no matter the current market Bitcoins value and latest growth, that’s still not important for the monetary system and it’s not a threat to them.
So, how the bitcoin will crash eventually? Well, the bitcoin mania will simply flip at the moment. When price start to fall, possibly without any reason, the same people who was buying at the hysteria when price was going up, they will sell, probably at a loss. I mean, someone big will pull the trigger at first. This will make the price go down even more, triggering panic and the negative spiral will begin. The opposite reaction that has led the price to go up, a form of mass hysteria, will also potentiate a massive sell-off and possible crash. We will see from which point something like that will happen!?
It’s basically the same story with stocks without fundamental background, if you ever traded with it. 🙂