It's not worth much to speculate about upward or downward price pressure. People made the same arguments when the exchange rate was $5, $25, $50 on up to $1,150, and now back down to $440/BTC.
These arguments have zero predictive value.
What's interesting to me is the repeating boom-bust pattern that we see as more people learn about cryptocurrencies, and as the Bitcoin protocol holds its own against an onslaught of attacks.
In the summer of 2010, the exchange rate was $0.05/BTC. Over the next year the price increased by 60000%, then proceeded to decline 90%. Even after losing 90% of its value, it was still up 4500% from the summer of 2010.
By the spring of 2013, the exchange rate spiked to $250/BTC, up 10000% ... then crashed and lost 80% of its value. Its post-peak minimum was still twice as high as the previous peak.
Again in late 2013, the price zoomed up nearly 3000% ... and it's now lost 60% of its peak value, still twice as high as the previous peak.
The past doesn't necessarily predict the future, but we're not seeing anything today that we haven't experienced at least three times already.
The way to combat this is with arithmetic. Calculate out "if Bitcoin reaches $2000, what would its market cap be? How many people are actually using it? Can it possibly be worth that much per user?"
It paints a pretty grim picture for Bitcoin achieving even a 5x boost over the past peak, at least for years to come.
That was my reasoning for not getting into Bitcoin in a big way during the hype cycle. It's incorrect, though. The best case for Bitcoin is that it becomes the global reserve currency, in which case your dollars are worthless and it makes sense to exchange any number of dollars for Bitcoins now before the dollars become worthless.
IMHO this scenario is pretty unlikely, but it shows the difficulty of doing fundamental analysis on currencies. Currencies are based entirely on confidence; they are, by design, intrinsically worthless. (Gresham's Law dictates that any currencies with intrinsic value tend to get driven out of circulation and cease to become usable currencies.) So the only facts that matter when evaluating them are the attitudes of the population towards them. This is why ForEx speculation is usually likened towards gambling; it's pretty much impossible to make a sane rational analysis of their value.
There are far too many unknown variables to calculate that. You don't know how many people would be using it to push it to $2000. You won't know what the market cap would be until that price is reached.
These arguments have zero predictive value.
What's interesting to me is the repeating boom-bust pattern that we see as more people learn about cryptocurrencies, and as the Bitcoin protocol holds its own against an onslaught of attacks.
In the summer of 2010, the exchange rate was $0.05/BTC. Over the next year the price increased by 60000%, then proceeded to decline 90%. Even after losing 90% of its value, it was still up 4500% from the summer of 2010.
By the spring of 2013, the exchange rate spiked to $250/BTC, up 10000% ... then crashed and lost 80% of its value. Its post-peak minimum was still twice as high as the previous peak.
Again in late 2013, the price zoomed up nearly 3000% ... and it's now lost 60% of its peak value, still twice as high as the previous peak.
The past doesn't necessarily predict the future, but we're not seeing anything today that we haven't experienced at least three times already.