Bitcoin: The Next Tulip Mania?
Bitcoin dropped 20% in value over the weekend. It is not an alternative currency. People hold a currency because of relative stable value. Bitcoin's value has gone from $2 to $1,000. IMO it is a speculative commodity with no underlying economic value except for the greater fool theory.
If the price to execute a transaction is the same, would I sell in bitcoin instead of dollars, euro or other home currency just to save a 2% transaction fee? No. It's because I might later monetize the bitcoins at a favorable exchange rate. But I could just as well lose value. That's speculation my friends which is fine. Just recognize it for what it is. And don't underestimate the negative consequences if regulators decide to get involved.
Like all speculative bubbles and ponzi schemes, early entrants will make money and get out but eventually it will end very badly.