I have read through some recent posts on the forum and I see that many people don't quite understand the fundamentals of bitcoin, and so they may not be able to do reasonable investment decisions.
I have talked to many financial experts during real life conferences and in online chats and they all tell approximately the same. There are two types of currencies: Payment Currencies and Investment Currencies. In fact there may be other types of currencies, but lets focus on these two types for simplicity. So, investment currencies have different features as compared to payment currencies and they will develop differently. Of course, they always have mutual features and even may be a replacement of each other sometimes, but generally they designed differently and it will be a mistake to expect investment currency to behave the same as payment currency and have the same growth factors.
Bitcoin is designed as investment currency. We should just accept this fact. Of course it may be used as a method of payment, but it will never become a replacement for a fiat currency. Some future cryptocurrency will be, but not bitcoin. Bitcoin will never be directly supported by any major government. They may regulate it, legalize it, they may even invest in it through some bank or fund, but they will never support it directly. This is because government is about regulation, collection and distribution, government is not a player. If some G7 government decide to support cryptocurrency, they will create their own cryptocurrency with the features they need, they will regulate it as they need and they will treat it as the national asset.
So when investing in bitcoin we should not rely on the possibilities that will never actually happen to bitcoin. Instead, we should realize the nature of bitcoin and act accordingly. Saying that, since there are no more evident factors of bitcoin growth, we should allow it to drop. I estimate that it may cost at around $1000 as the bottom rock. And then bitcoin will grow again. In about a month time frame the whales and high-rollers will easily take it back to $6000 and the following buzz will rise it up to $10-15k in 2-3 months. This would be quite typical behavior of the investment currency. I also think that the miners industry will survive this drop without any significant issues, they will just have a month or two of loss, and then they will enjoy the long ride - quite usual wave in the business. And mostly important, if bitcoin drop down and then recover, this will be huge stimulation of the industry in general and bitcoin in particular - it will show that bitcoin can survive the crisis and repeat the growth. So we should get prepared for the drop and take it as the logical development of an investment currency, and not as the "death of bitcoin".
These are just my considerations, so please let me know your opinion.
In general, I agree with your opinion. I also think that bitcoin will still fall several times in price very low, but I'm not sure that up to a thousand dollars. However, this fact should not be regarded as a tragedy, although the bulk of its holders will necessarily take it as the collapse of bitcoin.
However, I do not agree with your opinion that bitcoin was created precisely as an investment currency, and not as a means of payment. It seems to me that bitcoin was created as an alternative payment system to the existing payment system and therefore its main function is still a means of payment.
Yeah you are right. Many people do not have any idea about the market of bitcoin and give statements about the future price and the current situation of the red market, like they are financial scholars. This is the main reason that I never believe in predictions and always do my own observation of the market, but I do not give any statements about the price of bitcoin.
