Bitcoin seems unstoppable. Perhaps tulip bulbs did too, in the 1600s.
The price of Bitcoin crashed through $19,000 today, just days after hitting $10,000, $12,000, and other psychological barriers, and then retreated to $18,000. Many cryptocurrency experts are predicting Bitcoin will hit $50,000 or even $100,000 as institutional investors continue to pile in.
The pricing chart looks like a classic bubble before the crash.
The question is: how long can this proceed?
One of the drivers, according to James Ross of HedgeChatter, is lack of trust in government-issued "fiat" currency. Fiat currency is not limited in supply -- as we've seen in recent eras of "quantitative easing" ... read, printing money out of thin air -- and that devalues the monetary supply.
Bitcoin, on the other hand, is cryptographically limited to 21 million coins.
The buying frenzy was so strong, Ross said, that it crashed Coinbase, a popular exchange for buying and selling cryptocurrencies. Coinbase has since recovered.
Recently venture capitalist Tim Draper told me that cryptocurrencies are the future.
"In five years, if you try to use fiat currency they will laugh at you," Draper said. "Bitcoin and other cryptocurriences will be so relevant ... there will be no reason to have the fiat currencies."
As for a prediction on Bitcoin's value by the end of 2018?
"$40,000 by the end of 2018," Ross says.
(Note: I own no Bitcoin.)
