Bitcoin is facing the perfect storm. If you haven't already bought it, then stand well back !
by 
Thinking of investing in Bitcoin? Bitcoin is a dangerously overvalued bubble that could go any moment, and sure people will make a lot of money off it before it does, but it will pop, and likely very soon.
A fall is coming.
Given all the elements of a 'perfect storm' , how could it not. So yes, I predict an epic drop. Need some more reasons because there are many? Here are a just few...
- Bitcoin is NOT 'digital gold'. To believe it is madness. Why? Because Gold is a substance, it will still exist if the network it is sold on crashes to the ground, Bitcoin will not. Bitcoins value does NOT exist except in the sentiment of humans. Sentiment currently driven dizzy by fear and greed due to its already over-inflated price given the inherant problems it has.
- Businesses currently using Bitcoin are struggling and having to change away from using it because of transaction times right now. That can only get worse, and the community is still not decided on a fix for the transaction speed issue which lies between Segwit or Bitcoin Unlimited as the main options. So of course, it is kicking the can up the road. And there is no single entity in charge of Bitcoin able to make a decision, because that is the nature of this creation, it's a problem at times like now.
- And we are seeing the problem inherent in that 'freedom' made worse because it is a community not unlike something out of the book Lord of the Flies given the young age of most of it, so emotionally speaking, it's really not all that mature.
- Price is not rising, it has plateau'd at around $1000. The wise are saying it needs to stay there and for good reason. (Wise whales, the big money, may be helping it do so for now, but are their reasons community-based, or for self-interest?)
- Miners are burning millions of dollars in electricity to mine Bitcoin, it's hardly a green currency, and also as a result fees are increasing, so it is no longer what Bitcoin was designed to be at all, and it is un-disputably heading towards a slowdown in the network transactions, everyone agrees that is inevitable.
- Meanwhile everyone from Twitter to Wall Street is saying 'Wow Bitcoin, buy it now and get rich!' that alone should be the warning to the wise trader, the herd are coming! But what will happen to the network, then the price, as they all jump aboard?
- Then the ETF decision is coming 11th March 2017, if approved it will see the network flooded in a day on a scale larger than anything seen so far and could easily just grind transactions to a halt. Either way the decision goes, it will kick the Bitcoin price in one direction or the other. I personally think if it gets refused it may delay the perfect storm this time, but it will be only a brief reprieve if drastic measures are not taken soon to fix the underlying issues inherent in Bitcoin.
- And that in itself is a dangerous thing to bet on... who bets thousands of dollars on something that has 'inherant underling issues in its design' Bitcoin was and is a prototype, surely it is wiser to bet on the second or third generation model not the first. Of course it is, but this is not a wise community, it is made up large of children and amateurs loose on trading exchanges that have no regulation whatsoever! Of course the price is mental , I would be confused if it wasn't.
All in all there is a perfect storm of multiple disasters gathering right now in the Bitcoin world, and its all coming closer together, all centered around the perceived value of a Bitcoin. Because it has become so valuable that people are clinging onto outcomes emotionally with either fear of it dropping or greed and fomo that they might miss out on the million. It's the perfect storm.
I think in the long run Bitcoin will have a value, but not this current one, a real one, and not until all the problems underlying the network and design have been addressed and fixed, and sadly probably not before an epic crash down to low $$ Value, probably brought on by the more mature traders who know exactly how to manipulate everyone through price pressure, fear and greed. The ones probably currently propping it up at $1000 , waiting for the moment to dump.
So yes, I predict an epic crash followed by a period of time with a failed Bitcoin network, miners giving up on it and moving to mine other coins that can be trusted to work predicably, all of this because the necessary changes wont come without a disaster , just like in the real trading and business world. In some ways, we are all growing up right here in this experience.
Then when the carnage of that experience is finally settling, it will be followed by a long pause, a regroup by those who cared about Bitcoin all along regardless. And then it will start to become of real value after that, as a sentimental, historical item to own for a longer term, and to sell on some 'collectors' network kept running for posterity. Bitcoin a valuable antiquity, a relic.
Remember that the real long term value, not the sentimental one, is in Blockchain not in Bitcoin. Bitcoin was the shakey prototype that has a tonne of problems, and a huge emotional following sure, but some of those problems probably wont ever be fixed.
I dont want to be on the wrong side of that bet at its current price because it just isnt worth the pain that could come from getting it wrong. Many people will never forget Bitcoin, and for all the wrong reasons. I also predict that there will be specialized Bitcoin Therapists springing up not far from this date.
If you aren't in it already at a decent price, then stay well back and watch it go nuts very soon. Probably 11th March ETF is the first big catalyst if it gets approved, otherwise when the transaction speeds next slow down to a grinding halt someone big is going to decide they have had enough of holding onto the dream and they are going to dump it large from a great height.
As Harvey Keitel once so eloquently put it, "Keep your eye on the donut and not on the hole." That would be Blockchain not Bitcoin if you need it explaining, because Blockchain is where the real value lies. Bitcoin is without doubt, a bubble. Let it go.
See you on the exchanges ya damn dirty geeks !