Just my thoughts ...
1) It's a bubble .. not a sky-is-falling tin-foil hat conspiracy kind of bubble claim. It's a real bubble. It will burst at some point.
2) It's not regulated, meaning if the value disappears, you have no protection. For example, if a bitcoin exchange gets hacked and their (your) bitcoins are stolen, you're screwed. If large investors of bitcoin pull out and move to other crypto-currencies, panic will set in, demand will drop and people will frantically try to cash out before it's too late, which will ignite a bitcoin valuation free-fall.
In the stock markets, the exchanges can stop the transfers of stocks if selling becomes too erratic or quick or if there is suspicion of a mistake that is leading to the drastic change that will be corrected. They do this to protect investors from the "stampede" effect.
With bitcoin exchanges, even if some of them halt trading, not all of them will and none of that will stop wallet-based sales that will continue. Imagine watching the value of bitcoins drop every minute and your exchange won't let you sell yours!
3) There is no value of any kind in bitcoins beyond perceived (speculated) value. It's literally a "worth only as much as someone is willing to pay for it right now" asset
4) Mining bitcoins at this point is mostly pointless unless you have massive existing farming networks setup these days. Single mining servers have a lot more graphics cards, setup costs and operational costs (electricity, cooling, etc.) than normal desktop/tower computers.
.. and this is the one no talks about and no one gets ..
5) The price of bitcoin is being artificially manipulated by large investors through tactics such as "whitewashing" that are creating the perception of more demand and usage.
Think about this ..
Let's say you own a little general store that does $500,000 in gross (not net) sales per year and you want to sell your store. A normal valuation would be around $750k to $1.3 million. So, what you do is you make a deal with a "supplier" to actually buy items from you every day. Then, once a week, you order new (which is actually your previous) inventory from that supplier at the same amount you sold the items to them during the week.
That does not impact your net profit, but what it does is increase your total sales, which also increases your store's valuation. Now, your store is selling $2 million in gross sales per year and now has a valuation of between $3 million and $5.3 million. Of course any decent accountant will spot the manipulation, and more importantly, that manipulation is illegal because businesses are regulated by our local, state and federal governments.
However, with bitcoins, there is no regulation. So, what happens is that large investors are constantly selling and re-buying bitcoins over and over. This creates an artificial increase as they do it and the more large bitcoin investors/owners do this, the more the increase starts going higher more quickly, which makes every sale profitable.
They are literally making money off every sale due to their transaction volume, while normal people are playing the, "Should I sell or wait?" game.
I think crypto-currencies will eventually offer a tangible value and some are already doing this in some way. More importantly, they will become regulated, first at a country level and ultimately on a global level, which will help protect normal people from the tactics being used by large bitcoin investors/owners who would be breaking countless laws if they were doing this with regulated currencies.
6) The bubble likely won't burst because regular people panic. That's because when we have seen this happen, the large investors/owners of bitcoins reduce their selling transactions to stabilize the market, and likely start buying more for a short period.
7) If large bitcoin investors/owners ever decide to leave the bitcoin market or switch to other, newer crypto-currency markets such as Ethereum, the price of bitcoins will start to decline like an avalanche, starting slowly, but picking up steam as for-sale supply increases and demand decreases.
8) As
@ABQCOWBOY said above, don't be the last one holding them.
9) Anyone who compares this to other things like gold, silver, etc. is ignoring the fact that those things have tangible value, where bitcoin does not. Gold, Silver, Copper and other metals for example are used in a large number of products and materials worldwide. There has always been and will always be demand for those metals regardless of the price.
10) I am not down on crypto-currencies as I do believe there will be digital currencies in the future that provide both a financial and tangible benefit that will stabilize its value. I just do not think bitcoin is that currency because its valuation is based completely on speculation and will always be.
Now, with all of that said .. if you have some money to risk (and it is a risk) that you want to gamble (and it is a gamble), then go have fun! Just remember two things .. 1) it's not anonymous as people make you think, and 2) you might lose everything. If you can spare the money and do not mind the risks, you may make a lot of money as long as you are not one of the last investors standing.
