If any crypto currency ever makes it and becomes mainstream, then I am pretty sure it will not be Bitcoin, to many unsolved or even unsolvable problems. If that turns out to be true, then the question becomes whether we already reached the final decline or whether the speculation will continue. Personally I don't think we have reached the final decline just yet but at the same time I find it hard to imagine that Bitcoin will ever reach $100k or so, people are probably slowly becoming sane again. If you hope to make as much money as some did by getting in at $0.10 and exiting at $10k, I think the chances are pretty much zero. Maybe you can double your money or get 500% if you catch the bottom of a correction but you may as well lose everything.
I'd like to know what you consider to be "unsolvable" problems. While there are other cryptocurrencies solving problems in different ways, none have been around as long as BTC and none have endured the trials that BTC managed to survive. I'm rather shocked that the system has been so robust.
I think a fallacy many make is that this is open source, not corporate-created software. That changes a lot of the context. For years, people compared Linux to Windows and Mac and I can't count the number of times Linux was dead. I can probably actually count the times that Bitcoin was dead, but it's still a lot.
If you watch other crypto prices, many are tightly bound to BTC. I expect to see Bitcoin has a core part of the cryptocurrency network of the future. Maybe BTC won't be the ultra high-speed payment provider we had hoped for, but it's really difficult for me to accept that it will die off.
Ultimately, we're all speculating. I love that this is such uncharted territory.
First things first, nothing is truly unsolvable. Proof of work and its energy consumption, for example, seems highly problematic to me but it would certainly not be impossible to swap out the entire consensus algorithm for something else. Whether Bitcoin would still be Bitcoin in that case then becomes somewhat of a philosophical question. If you think it would still be Bitcoin, then that is not an unsolvable problem assuming you believe proof of work is not going to be a long-term viable consensus strategy. If on the other hand you think proof of work is a defining feature of Bitcoin, then that would be an unsolvable problem.
With that out of the way, the major problems seem to be scalability, pseudonymity instead of anonymity, missing regulatory oversight, mining centralization, adoption and as already mentioned proof of work and its energy inefficiency. I am probably missing things, I went from really excited about Bitcoin to a more rational and pragmatic view about the time it reached dollar parity and haven't followed the development too closely ever since because in my opinion everything in existence is really far away from prime time and it will take some more new ideas on the level of Bitcoin itself to get there, i.e. some tweaks here and there alone will not be good enough.
Also note that I mentioned such general things like adoption as problems but what I really mean there is in the interaction, for example between regulatory oversight and adoption. But I don't want to flesh those arguments out in a comment, it would just be very time consuming and I don't think I would have to add much if anything new, many others have discussed all kinds of problems again and again. Some will follow those arguments, some will dismiss them and repeating them once again won't change that.
When you are talking about digitizing the world's assets, 100k doesn't even come close. I would recommend thinking more broadly and being open to what is really happening with Bitcoin, blockchains and alt coins.
In the previous 3 bubbles bitcoin stabilized after the crash around 2-3 times the top of the previous bubble.
So applying this logic, the bottom of this bubble should be around $2-4k. For a couple of reasons however this bubble is different - lots of finance guys participating. Because they are experienced they will buy ahead of that to make sure they don't miss the bottom. So I see this bubble bottoming at $5k. This has the nice property that most of the "dumb money" who entered in Nov-Dec without any idea about trading or cryptos will lose money (markets tend to make sure that people who entered during a frenzy lose).
The dataset you are basing your assumptions on is extremely small. Your reference should be the history of highly volitle assets, not the history of bitcoin. The behavior after previous collapses tell you precisely nothing about what is going to happen next.
Well, mining Bitcoins is a net negative of wasted energy.
Every bit of computer power beyond the minimum threshold of efficiency needed to operate the transactions and database is a net loss.
Peak efficiency of the Bitcoin mining network would be about 3-10 basic desktop computers. Instead Satoshi Nakomoto's Proof of Work will waste more and more energy with nothing to show as time goes on.
Although if you take into account the cost in electricity that has been turned into heat, that does kind of represent s massive negative. That sacrifice of power is only worth it (sort of) if Bitcoin retains more value than the electricity was worth. Of course if cryptocurrency really does become worthwhile as a currency, it could be an acceptable price to pay.
How many people think that cryptocurrency has a real future worth that expenditure? I would guess fewer everyday, but I could be very wrong.
Owning >51% of the mining power for a sustained period would make it impossible to trust and presumably eventually wipe it out. The hashing power is frequently compared to small states, so a large state could presumably put together enough hashing power to sustain such an attack.
I would buy more at 1k even though I don't really believe in it. Just because of the volume of people and brainpower being devoted to it. Basically I would be hedging in case I'm wrong (which is is a frequent occurance).
Before I begin, I'm not going to tell you what to do with your money. But when I see questions like this, I often think that there may be some inexperience with investing. So here's how I look at investments. This is not advice -- you do what you want.
If I'm investing in a company, the first thing I do is read the quarterly and year end reports. I take a look at how the money is being used. I look for things that might be fishy. You need to be careful, even with blue chip stocks -- often the numbers don't add up. I look at how well the company is executing. What kind of margin are they getting? How are they using that money? If for growth, then what are the investing in and how well is it paying off? If for profit, how much profit are they making and what are they doing with the profits? That kind of thing. I look at the products they make. I read reviews. I look at the competition. After I've done all that, I decide how fairly the company is valued. Often they are over valued. Sometimes they have about the right value. Rarely they are undervalued. I try to buy the latter stocks and hold them for a long time.
Just because of how I do my job (I am a internationally remote contractor), I am forced to speculate on currency. Note the subtle change in vocabulary. I am not investing in currency. I don't expect a rate of return over time on currency. Instead, I look at geo-political situations and I guess how it might affect the price of a currency against another currency. At the moment, I live off the Japanese yen (I'm in Japan), but I get paid in Great British pounds. I need to have some insurance that my revenue stream is relatively constant, so when GBP is very low (it was down to just over 120 JPY last year!) I try to hold it. When it is very high, I try to sell it. Sometimes it makes sense for me to even buy it when it is low. When I am looking at this, I look at both the British and Japanese economic policies. I look at elections that might change that policy. I look at the (complete lack of) progress wrt Brexit, etc, etc. But this is not an investment. My goal is to hedge against the changes as much as I can, because otherwise sometimes I'm working for 60% of the wage that I normally make (and it's hard to ask your clients to double their payments just because something like Brexit happens).
Now, let's look at Bitcoin. What economic factors influence Bitcoin? It would be tempting to say "none", but this is not strictly true. First, we have to look at the likelihood that bitcoin will become viable as a general currency. It's pretty unlikely, but the chance is not actually 0 (Much to my surprise, I can actually buy things with Bitcoin from mainstream shops in Japan -- even a local pizza restaurant takes them). However, it's clear that changes to the protocol need to happen for it to scale. To understand the implications, you have to understand the chances for various proposals to succeed (both technically and politically).
When you look at trading currencies, often you look at indicators like interest rates because the change of interest rates encourages (and sometimes outright forces) trading of the currency. With bitcoin there are precious few outside influences like that. There are things like "tethers", but since they are a complete scam you have to figure out what it's likely to do to the price (will it force people to buy BTC, or will it tank the price).
Having said all that, I hope you can see a kind of gradation in the "investment" type. When I buy stock, I can reason about the performance of the company by looking at their past performance, their execution, their product, the oppositions performance, etc. When I engage in FOREX (which I try to avoid, but alas am unable to), I am stuck with the politics and economic policies. I have to kind of guess what countries are going to do and how that will result in changes to the price. I try my best to stick to hedging strategies, because otherwise you might as well be laying bets at the bookie wrt economic policy. With Bitcoin, it's just gambling. The price swings are generally due to hype, scams, and bad actors -- with only a little bit related to potential viability. And I would say the the long term viability of BTC as a whole is pretty long odds (remember, this is not advice -- decide for yourself).
So if you want to gamble, then gamble. I'm not going to stop you. But I don't think you will get any useful advice on "investment" in Bitcoin. It's just not that kind of vehicle.
When I engage in FOREX (which I try to avoid, but alas am unable to), I am stuck with the politics and economic policies. I have to kind of guess what countries are going to do and how that will result in changes to the price. I try my best to stick to hedging strategies, because otherwise you might as well be laying bets at the bookie wrt economic policy. With Bitcoin, it's just gambling.
That pretty much sums up why I've stayed away thus far. I've done well with equities over the years, but FOREX kicked my ass (a lesson I could thankfully afford). As you point out, there's at least some semblance of sense in FOREX, which I obviously have yet to grock. I don't even play games in Vegas unless I can figure out the odds ("how are you going to fuck me?"), and I fully cop to that as gambling. Cryptocurrencies, phhhht, I haven't the first clue as to what drives the price, or how I'm going to get taken. To me, it's even worse than gambling, because though I might know the odds at the craps table, try as I might I can't get a grasp on the drivers of cryptocurrencies other than hype.
With all the respect consistent with the sentiment I’m expressing, I suspect you wildly overestimate your ability to improve your predictions about company performance by reading about the company.
I've discussed this with some analysts who are looking at the cost of mining hardware and also power consumption/costs. They concluded that around $5k is the appropriate target price right now.
Long term price of mining does not matter at all, because the more expensive mining is - the less mining does happen - the less competitive mining becomes - the less expensive mining becomes.
No matter how low cryptocurrency price is - some of the miners would be able to afford it (long term).
price can be irrelevant. i have mates that buy on one exchange and sell on another right away. they make weekly on the difference. some cap you at what you can buy/sell and increase what you're allowed each time. with a few $k you can make $150 a week. i.e buy on coinbase if that's cheapest. transfer to another another exchange and sell. bingo. few of them been doing it for months.
