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Bitcoin Nears $6,000 For the First Time (bloomberg.com)
Bitcoin closed in on another milestone Friday, as the digital currency approached $6,000 for the first time to put its gain in 2017 to above 500 percent. From a report: The push higher comes just three days after bitcoin suffered its biggest one-day drop in a month on rising concern that regulators are increasingly targeting digital currencies. It's added almost $500 in value in the past two days alone.
There is no rational basis to predict the future behaviour of bitcoin, so if you treat it as an investment, i.e. buy in and hope/assume it will increase in value, understand that you are gambling, not investing. I say that as someone who is doing exactly that right now. I had been on a policy of ending each trading session with only cash in my trading account, expecting btc to potentially crash after events in recent weeks, and while I did make some money trading, I would have made five times as much if I had just held bitcoin until today. So I decided to become a gambler for a while and went all in on btc a few days ago. I have a fixed target to cash out at though, and as I'm only trading for fun with a few grand, I can afford to take the risk.
Oh no... it's the future.
Currency isn't supposed to generate wealth. It supposed to store wealth and make transactions easier. If it is generating wealth then it isn't a good currency. Of course, you are talking about investment, not a currency. But my point is that as long as people are treating Bitcoin as an investment, it really isn't much good as a currency. And if it isn't good as a currency, what good is it for? You are only investing in it because you hope someone else will buy it from you for more. It has no intrinsic value. It's no good for currency since transaction times are too long and transaction costs are too high. Eventually, people will figure out that Bitcoin is worthless. The only value it generates is taken from the suckers at the bottom of the pyramid.
If you want to design a crypto-currency that actually functions as currency, you gotta design something that isn't used as an investment. Otherwise, speculators are going to ruin it.