Lesson Learned #4: The chart does not always go up, it will come down eventually. Be careful not to be the one that goes down with it. Nothing just keeps getting bigger. It will eventually deflate.
Yes, eventually every bubble will deflate - and arguably BTC is a bubble. But, that said, no one knows how big the bubble is going to get, or when it'll burst, or how bad it'll be when it does. It might burst tomorrow, fall to $50, and confidence will be so screwed that it never recovers to anything like the level it's at now. Maybe. Alternatively though, it might continue to grow to $10,000/BTC and then deflate to $5,000. Investing now would still represent a fantastic return after then crash.
I suspect that when the bubble does burst it won't actually be that bad for the reason that it's quite hard to get your money out of BTC. Exchanges are slow - a sell order can take hours or even days in rare cases. Consequently, people aren't likely to be able to cut their losses quickly, so they'll end up with BTC they can either sell on at a huge loss, or keep. People will keep them in case they go back up. That supply side limiting will stop the market collapsing completely. Markets can only collapse as quickly as people can pull their money out.
That said, I don't own any, so my speculation is irrelevant.
Yes, eventually every bubble will deflate - and arguably BTC is a bubble. But, that said, no one knows how big the bubble is going to get, or when it'll burst, or how bad it'll be when it does. It might burst tomorrow, fall to $50, and confidence will be so screwed that it never recovers to anything like the level it's at now. Maybe. Alternatively though, it might continue to grow to $10,000/BTC and then deflate to $5,000. Investing now would still represent a fantastic return after then crash.
I suspect that when the bubble does burst it won't actually be that bad for the reason that it's quite hard to get your money out of BTC. Exchanges are slow - a sell order can take hours or even days in rare cases. Consequently, people aren't likely to be able to cut their losses quickly, so they'll end up with BTC they can either sell on at a huge loss, or keep. People will keep them in case they go back up. That supply side limiting will stop the market collapsing completely. Markets can only collapse as quickly as people can pull their money out.
That said, I don't own any, so my speculation is irrelevant.