We continue to see stories of doom and gloom for bitcoin. Having been declared dead over 177 times (as of this writing) throughout its existence and we are sure to see more such declarations. [99bitcoins.com/bitcoinobituaries/]
There is a consistent stumbling block that bitcoin and cryptocurrencies are viewed as a stock or currency trade which is why most people can't wrap their heads around bitcoin's constant increase in value. Retraces yes, small bubbles here and there, yes, but constant growth, let me explain that...
The Bitcoin Rise...
The thing to remember is that Bitcoin is not a stock. Bitcoin is a protocol, nothing more than a useful tool that costs nothing to use, in and of itself. Costs only come in when a) transferring your fiat into the bits on the chain and b) a small amount to transfer those bits to others(fees). We cannot judge its growth like we do a stock. Stocks are a reflection of businesses (supposedly earnings, but in these crazy times stocks are really just a popularity contest - hence current grossly inflated markets. Refer to just about anything by this guy to see the stats - youtube.com/user/TheMoneyGPS.
Businesses have limited reach/capacity. Cryptocurrencies, like bitcoin have unlimited reach, and technically (with a few upgrades which it is in the process of addressing) can service the entire planet. It's growth is limited only by the amount of people who want/need to use it (its business case can include everyone (all 7Bln) as everyone needs to transact value, and bitcoin has no borders.) There is another example of this - email, webpages, chat. Webpage/email/chat use grows and grows because its easy to use, relatively free and has no borders (china, N. korea try, but can't stop it) and so growth, unlike businesses, is quite unlimited. With $5 cell phones coming, that reach is truly unlimited.
Additionally to that list, you can get Bitcoin debit cards (Visa/MC) which I used on a trip thorough Canada/US/Mexico and back again, for food/fuel/accommodations. Bitcoin is fully spendable now with dozens of companies building bridges bridges daily.
So when to buy? Literally anytime. Dips are good but waiting for big crashes to load up, you may be waiting a long time and by then, the crash may dip down to higher levels than just buying in today. Chances are higher that the stock/housing/bond/currency markets will crash much sooner than bitcoin. Trace Mayer(www.bitcoin.kn), who has predicted bitcoin's rise quite accurately since its early days is calling for $27,000.
And these rises are just the beginning. We haven't even hit the network effect. You will know the real rise when you see massive spikes in new wallet creation. The barrier to acceptance is not spend-ability, its in individuals taking time to learn what bitcoin really is, and that is just starting to happen. Just like email in 1998 when you had to be a command line guru to have an email account and people laughed at you when you told them to start using it, and 10 years later everyone and their dog has multiple email accounts, don't you wish you could have invested in the email protocol? Email wan't designed to be invested in, but Bitcoin is. And what is more important to individuals, money or email? No brainer. That is why projections of $500k-1Million bitcoin in the next 3-12 years actually look viable and why Wall Street still cannot understand it. Well sort of. You have Dimon of JPMorgan dismissing bitcoin as a fraud, and then after the news causes a dip, buying millions. Ya, they know where it's going.
The repetition of bitcoin having nothing to back it is a very old misnomer, probably good to get that settled now. It actually has two values behind it.
1) Initial worth. Bitcoin's initial worth is the amount of effort put into creating and circulating the coins. Since miners have to invest money and time into creating coins (mining) just like any commodity which takes investment to create which is an overhead for the miners. That investment (overhead+miner profit) sets a base value for which the market pays make use of as anyone would for an ingot of gold. Like any business, those are real numbers and must be recovered for the miners to succeed.
But the market needs to see an ongoing value to choose to buy it from the miners and use it, hence...
2) Ongoing worth/value. Accounting, safety and security of your funds and fund transactions. We create value from the work we do and we want that value protected, from the time funds are acquired to the time they are to be spent, whether that be next week or waiting for retirement. What we see with fiat currencies is that value dropping all the time (90% over the past century and accelerating.)
People turn to precious metals, real estate, etc. but they are very hard to transact with. Fiat is easier to transact with but the fees (especially over borders) are killers. Bitcoin's value (as opposed to price) is the ability to have safe/secure transactions that are faster, minimal fees, with a fair amount of privacy. That is highly valuable in itself. The average person pays a minimum of $300 a year just to have a bank account and suffer brutal fees to pay for that top heavy system of so called safety and security. A home alarm, we could say has no intrinsic value (a box that beeps) or a guard dog (meat that barks) but they have real value in that they bring a sense of security so that we do not lose value we have collected. Some would call that instrumental value as opposed to intrinsic, but I see it as both. All of bitcoin's other features enhance this, making bitcoin an incredibly useful and flexible value transaction system (numbers that protect your previous effort).
If we are willing to pay for a book containing lines of columns for tracking wealth, or a spreadsheet for doing so, then there is value in those things. It is a myth that bitcoin has no value, spread by the banks who are scared by what bitcoin is capable of, namely the demise of the banks usefulness (and that can be called the third value).