“What goes up comes down”
This is a long old saying. It has a very simple meaning. It has happened, is happening and will always happen. It is the fundamental of economics.
When we see the history, what rocketed up will eventually come down. There was a technological boom which crashed in 2000, housing market boom which crashed in 2008 and also a bitcoin crash in 2013.
I would like to focus in the crash of 2000. In 2000 the crash was due to lack of income of the technological companies. The price of companies of that time went up just because of demand supply. The companies had a ton of users but they had no income. Debt was also a huge problem to the companies.
What you need to ask yourself is, for what value of bitcoin are you paying $10,000 dollars for? What are you going to get in return for that investment? What change has been done to bitcoin that its price has risen from $1000 to $10,000 in a year? Why would people hold bitcoin at $10,000? Sincerely speaking, I don’t get an answer for these questions.
Bitcoin doesn’t have price stability and anti-inflation property of gold. So, I can’t treat it as gold. It is too volatile. To earn money from bitcoin you have to buy it low and sell it high. So, people aren’t going to hold. It means the price won’t stay at $10,000. We can’t also get a yearly return. And bitcoin is not a company whose growth is predictable. So, when I try to see value of a bitcoin. I can’t get that security and confidence which I require.
So, I would like you think about these things. And ask yourself if bitcoin is worth $10,000? And why would people hold bitcoin for it to stay at $10,000 or go higher?