Bitcoin Price

[dewunderlich]

I've been holding a few bitcoins for about 3 years now and the entire time I keep reading proclamations that bitcoin will be soaring to $100,000 or $1,000,000 in the next 1 to 3 years. My question is how can this ever happen if every time it gains $500 to $1,000, the price plummets and the analysts all say it's because it was over-bought. I've also read continually over this time how it's the best performing investment out there. It seems like that's because they keep ignoring the huge drops in price and then start talking up the gains it makes back. Like the latest one where everyone is so excited that it's nearly tripled in value since it was at $4,000. The problem is that before it was at $4,000, it was at $10,000 or $15,000, or even $20,000 at one point. People like me who have been holding it for this long haven't realized any gains. I'm ready to sell it all and take my losses.

[grabberfish]

First thing that should be mentioned is that playing the markets for investment purposes is always speculative and never an exact science that can produce predictable results. You should only invest (gamble) with what you are prepared to lose. If you are seeking long term growth investment options, consider an established fund manager with proven track record. My personal top-tip recommendation would be to take a look at Scottish Mortgage Investment Trust (LSE:SMT). Bitcoin is essentially a high-risk gamble right now.

Now to the subject of your post. There was a time when the community felt confident that bitcoin could (would) reach 100kUSD or higher. That was many years ago now, before the SegWit debacle and resulting forks. The landscape has changed massively since those days. What has changed? Well, the peer-to-peer cash project was hijacked by a bunch of programmers who want to usurp the network effect and slip their cuckoo into the nest. BTC has been crippled with many modifications to the protocol that have destroyed the benefits of bitcoin - things such as RBF (no 0-conf), SegWit (no chain of digital signatures), Lightning Network & Liquid (siphoning off miner rewards), and a fixation with "decentralisation".

This might be an unpopular opinion, but BTC will never scale with the current roadmap. Why do I say that? Consider these things:

• A 1MB max block size limits the number of transactions to far below what would be considered enough for global use. Limited block space results in competition. That drives up fees.
• A high transaction fee will not be paid by users. The last time I went to make a BTC purchase, the fees were 8EUR when I was buying a round of drinks. Nobody in their right mind would pay that. Do not listen to those who say "moving a million for only 1000USD is cheap!" - they are speaking from a position of complete ignorance.
• Diverting miner fees off-chain to other (non-mining) entities removes the very incentive for mining.
• Lightning Network will never work due to the path updating issue.

The other bitcoin forks have a better chance of delivering global peer-to-peer electronic cash, but there are still many hurdles to cross and nefarious players would like to see the project fail. Unfortunately w are seeing similar moves to disrupt BCH as we saw with BTC a number of years ago when Core stared their censorship campaign. A certain subsection of the BCH camp trying to impose a tax on bitcoin is unhealthy, but the sheeple tend to flock around personalities and are adept at generating noise. Although this current threat appears to be diminishing, the essence of these similar efforts revolve around trying to modify the base protocol to make things easier for the 21st century programmer. It all reminds me of when some dev tried to tell Linus that Git should be written in C++. Just because it's easier does not mean it is better.

The bitcoin landscape is fractured. The technology is sound. People trying to modify the protocol are fucking it up because they have some knowledge of bitcoin, but lack complete understanding.

Only time will show if this experiment will succeed. I hope so, but don't bet your house on it.

[dewunderlich]

Thank you for that excellent response. For the record, I never invested believing it would actually go to 6 or 7 figures. I was just hoping it might eventually get a little higher than it's previous high - maybe $20-30K. I just don't even see that happening any time soon with the hard resistance points seeming to pop up every time it increases a few hundred dollars. I think this may be a downside to our technology being so convenient these days. It's really easy to set stops in your investments so you end up with lots of people looking to take their profits at each of these levels which will continue to keep the price in check. I think the only hope for consistent growth is in institutional investors increase significantly since they may be more likely to hold on to their investment for the long-term.

[grabberfish]

BTC has been steadily rising since March (when all markets took a massive hit) and might hit above 20kUSD in the coming year. It still has the network effect working for it, but the simple fact that people will not pay the required transaction fees as the popularity increases will soon end the climb.