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Lots of good comments in here. I'll respond generally:
1) I don't think BTC is going away, but I don't see it going mainstream either. It's not likely to replace the USD any time soon. There's a lot to like about the technology. There's an equal amount to dislike about it as a currency (including how incredibly wasteful and inefficient it is).
2) I also don't think it's a replacement for other hard money, like gold/silver, but it's a useful substitute for those that want to i) trade the volatility/appreciation (particularly around currency debasement/inflationary pressures), ii) shift wealth away from a local/disadvantaged currency into something assumed to be more stable, and/or iii) skirt government regulation.
3) Note that prior to last year's explosion in BTC, the BTC to gold ratio seemed to settle in around 5 for a couple years. At current gold prices, that recent ratio implies a BTC price of around $10k. But as noted, the current size of the BTC market is still relatively small. If we look at the gold market (all mined ounces) and divide that by the number of maximum BTC, we get 120, so there could be massive inflation in BTC (to an implied $240k/coin) -- but that assumes that all the gold in the world is bullion for currency/store of wealth purposes. I'd guess the theoretical limit of BTC relative to gold parity would be less than half that amount.
4) Not sure how many read the article I posted, but my questioning a potential crash was based on:
i) a potentially fraudulent coin offering that's being used to buy BTC
ii) if such coin was indeed found to be fraudulent, the buying that's fueled BTC could be strongly reduced, which would put massive technical pressure on BTC price in the near term
iii) such a fraud/crash could attract additional government scrutiny/regulation that might make BTC less attractive to some
No one has addressed that.
5) Markets can stay irrational longer than you can remain solvent. Market timing is hard. And I have no dog in this hunt -- I have no material BTC positions. For the believers, I don't think a long-term DCA strategy is crazy. But I'd be hesitant to add to a position after the recent run-up and noise around Tether.
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