Bitcoin value will most probably fail in the near future. My question is WHY?

[cedivad]

Bubbles.
They tends to explode.

One Bitcoin was quoted @ 4€ just a few months ago, now it's @8€.

I'm one of the guys that believes that the value should be much bigger, but i'm not confident on buying a big number of Bitcoins because i believe it will fail another time.

My goal isn't to speculate: i would like to buy 10000€ in Bitcoins and if from now to the next 5 years it's value will stay the same i would be really happy. But i'm really afraid i would lose my investment.

During the peak of the last summer, it was a rumor of the biggest excange getting closed down to make the price fall.

What could happen now?

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[kangasbros]

It is ridiculous that someone is paying 0.1 bitcoins for one euro, euros are definitely in a bubble. Anyone with necessary expertise can print euros, and banks can create them out of thin air while you can't do same with bitcoins.

So I disagree, it is euros that are in a bubble, not bitcoins.

[cedivad]

It is ridiculous that someone is paying 0.1 bitcoins for one euro, euros are definitely in a bubble. Anyone with necessary expertise can print euros, and banks can create them out of thin air while you can't do same with bitcoins.

So I disagree, it is euros that are in a bubble, not bitcoins.

What you are missing is that there is about one billion people using Euros and having it's belief and work of a lifetime on that concurrency.

You are missing this.

I could agree with you that the Euro, along with the Eurozone, is a thielf to our national sovranites, and that a group of bankers has control of our lives, and that is bad.

Still, your post is meaningless for me.

Not to talk about the USD.

[Scott J]

What has become clear recently is that if (or when) Silk Road gets shut down, the Bitcoin price will take a big hit.

[memvola]

During the peak of the last summer, it was a rumor of the biggest excange getting closed down to make the price fall.

What could happen now?

A lot of things can have an impact on the price (commerce getting a hit (e.g. SR closing), exchanges malfunctioning beyond lowest expectations, ponzis getting unusual coverage in the media, etc.), but I think the market is much more resilient than last year. It would never go down to 1.5€ a piece again if some calamity regarding the network itself doesn't happen (brute-force attack by an entity with deep pockets, a bug discovered in the protocol itself, etc.), which is unlikely.

This situation can change if the price reaches euphoric levels again, but I think this is equally unlikely. Though I wish it stayed around 10$-10€ for a whole year, and it won't happen either.

[nevafuse]

i would like to buy 10000€ in Bitcoins

Now is not the time to put more than you can risk losing into bitcoins.  As others have said in this forum, there are many things that could make the price plummet again.  Mtgox is still one of the largest trading websites.  A bad piece of code was found the other day.  If anything happened to it, the value would definitely fall.  Silkroad is one of the largest merchants.  If the it went down, that'd be another reason for the price to fall.  There are still too few merchants & exchanges to keep the price stable.  Don't get me wrong, I doubt any of these things will destroy bitcoin.  But there is no telling how long it will take until we get better/more exchanges & merchants to help stabilize the market.

[Kupsi]

But i'm really afraid i would lose my investment.

That's the problem for all of us. I can't invest more in bitcoins than I can afford to lose.

But if you will be happy with your investment in bitcoins if it has the same value in 5 years time, I suggest you invest  Euro 1000 in bitcoins now and save the rest. I believe bitcoin will either be worthless or trading at $1000+ in 5 years.

[Stephen Gornick]

Bubbles.
They tends to explode.

I remember this same conversation about a year and a half ago when Bitcoin spiked from forty cents to parity with a dollar.   There was no reason in the world for it to be valued so high and that it was a bubble and would collapse.

It did drop 40% after ($1.10 to $0.60 ish) but I'm still waiting to buy back the bitcoins I had sold at $0.50.

What could happen now?

If bitcoins are truly determined to be a form of "prepaid access" which can be spent internationally and is sold to those in the U.S., then FincCEN might be of the opinion that no matter the amount, the seller needs to collect identity.  If they were to state it clearly like that it would definitely set the mood.

There could be some widely used software that sends out an automated update and the update happened to have a wallet stealer buried deep inside, thanks to an automated build and release system that a hacker was able to slip in a few lines of code without anyone noticing.  That would not be a good thing for bitcoin.

Here's another scenario.  The block reward drop could come, and the price stays at this $10-ish level.  People that bought assuming it would go up from here, start selling, and it is back to single digits, which gets exacerbated by the momentum traders.  Especially once a method to short bitcoins on margin returns.

Perhaps much of the demand is coming from ponzi victims running out and buying bitcoins and handing them over.  When the ponzi ends, not only will that demand for bitcoins drop off, but the ponzi-master spends them suddenly to lock in the value at a higher price.

Lots of things to legitimately be worried about.

That's why buying bitcoins to hold cannot be considered anything but speculation.  But for a $100 investment, the downside is $100, the upside potentially could be a lot more than $100.

[BrannigansLaw]

If silkroad was to go down people would just migrate to a silkroad equivalent. Their out there just now as well known and word will quickly get around.

[FreeMoney]

If silkroad was to go down people would just migrate to a silkroad equivalent. Their out there just now as well known and word will quickly get around.

Agree.

With estimates at $200k worth of fees per month for them you'd expect some people to be waiting in the wings. It isn't like SR is a fluke, it's what happens when people have bitcoin.

[DeathAndTaxes]

You probably mean "fall" not "fail" in the title.   Normally I don't care much about grammar or spelling but it does change the meaning in this case.

[Vandroiy]

2011 was a classical bubble, Mtgox hack probably had little effect on it.

If you want to invest in Bitcoin, but don't want to burn money in the volatility: patience was a good method so far. Some people also use cost-averaging strategies: they limit the amount of fiat money they spend per week, such that their BTC price in the end is some decent average.

I personally like to buy either in crashes or stable times. Rallies make me uneasy, especially when they go on for too long. I don't understand it either why so many people like to buy in these.

[cedivad]

Thank you everyone for the replies, it's becoming an interesting thread.

Yes, I meaned fall and not fail. English is not my mother language.

10k would be what I'm willed to lose, but you know, not to lose is always better than to lose.

People usually buys during the peaks because they think the value will raise again, just like in trading.

I also think the "buy a little bit today and a another bit tomorrow" to be a great strategy.

[candoo]

invest your 10.000 US dollar into pirate or bitcoinmax and get ~6 % per week!

[Transisto]

OP title fail, 

Bitcoin value will most probably fail in the near future. My question is WHY?

A value does not fail but fall.

You make a bold statement then ask us what it's based on. ... Go figure ... This look like nothing but an obvious request for financial advices.

[Shadow383]

If silkroad was to go down people would just migrate to a silkroad equivalent. Their out there just now as well known and word will quickly get around.

Agree.

With estimates at $200k worth of fees per month for them you'd expect some people to be waiting in the wings. It isn't like SR is a fluke, it's what happens when people have bitcoin.

That would take a while though, probably several months for an alternative to grow to the same size.

One other issue related to the silk road and such would be if governments decided to make it very difficult for exchanges to operate - that would really harm bitcoin use.

But yes, I agree with the author that the price is likely to drop a little short-term unless something major happens. OP, why don't you buy some long-dated options? That seems like the ideal for your concern...

[cedivad]

invest your 10.000 US dollar into pirate or bitcoinmax and get ~6 % per week!

Never. I wouldn't trust them even with 1 bitcoin.

OP title fail, 

Bitcoin value will most probably fail in the near future. My question is WHY?

A value does not fail but fall.

You make a bold statement then ask us what it's based on. ... Go figure ... This look like nothing but an obvious request for financial advices.

Sorry, but I tought the statement to be condividible and I tought we could start discussing on the reason on why the bitcoin price will probably *fall* soon.
By no meaning I was willed to offense or to create confusion.

But yes, I agree with the author that the price is likely to drop a little short-term unless something major happens. OP, why don't you buy some long-dated options? That seems like the ideal for your concern...

Sorry, but I'm not an expert in financial instruments, a link please? I also don't have a lot of trust on the privates making these instruments, I think that buying bitcoins directly to be better.

Again, this want be a topic about financial suggestions for me, rather one where we can discuss the reason that will bring the price down shortly. If that was due to happen, off course.

[molecular]

What has become clear recently is that if (or when) Silk Road gets shut down, the Bitcoin price will take a big hit.

I have to agree on this one. Silk Road getting busted or disappearing would install quite a negative media hype. A good time to buy, I would say, because it wont go to 0, but recover afterward.

[SaintFlow]

OP is most likely in a short position. My question is WHY?

Kudos to second post.

[cedivad]

As of how I have 0.5 BTC mined and nothing more.

I would like to invest, but I wil wait. If I lose the train I will not die.