I'll admit that I had a chance to buy BC at $12. And didn't. (That's twelve. Not twelve hundred, or twelve thousand. Twelve.)
That doesn't make me unique on HN by any stretch. But I have kept a watching brief over the years. Here's my gedanken experiment take on all this.
Originally, appealing to IT nerds. Demand grew slowly and the community with it.
Mysterious founders and mining syndicates made a (theoretical-until-sold) motza by hoarding coin. Articles started appearing on the strange new tech.
However, at some point demand crossed over into darknet territory. Demand accelerated. At some point, major crime syndicates started looking at BC as a way to launder significant amounts. Demand really grew as very heavy money entered the market.
Let's pause for a moment and consider the possibility that in the last year, the majority of the market (by volume; excluding the founding hoarders) would have been the "criminal" element. What are their key requirements of this "investment"? Opaqueness, security, ability to trade in volume, low or no "laundering losses". With BC, it's pretty much all green lights. So they kept piling on.
Then a funny thing happened. The financial services establishment, the same folk that have historically made fortunes by fleecing the great unwashed, saw yet another opportunity to part the rubles from the rubes. And so, abetted by the media's voracious appetite for sensation, talked up this strange, "new", "this time it's different", investment opportunity. Highlighting the overnight millions to be made, with stories of people who bought low and sold high. Gushing about the net worth of the mythical Satoshi.
And so the proles started piling on. When your friends and relatives (the ones that call you for IT support), who have never heard about BC before last month, start telling you that they're thinking of buying BC (aided by the handy smartphone apps of the new "pick and shovel makers"), that they're borrowing to by BC, that their friends are buying BC. Then any reasonable person should be hearing "Danger, Will Robinson!".
Criminals aren't stupid. The kind of criminal enterprises that need to wash hundreds of millions of dollars a month or a week are not stupid. So what would they make of the increasing volatility? The prospect of not only washing your money, but growing it in the same transaction would be pretty alluring. However, as the sums increase, so does the risk. What if it goes down as hard as it goes up? What's a fiscally prudent criminal to do? Traditionally, if you get 75% of your money back from the laundry, you're doing well. What if the market turns and insane profits become insane losses?
When you then add the increased regulatory scrutiny on BC, issues with exchanges, questions about security and transaction rate limits - perhaps that makes BC seem increasingly risker than some of the cryptocoin newcomers? As a launderer, maybe something like Monero might be a safer alternative? Or maybe stripe your money across a bunch of coins types? So you start pulling out. In droves.
What happens to a market when some of the biggest players cash out? The rest crash out.
Which is not to say that BC won't bounce around, recover, fall again, recover some more etc. But I believe, in the long term, there are better options out there and historically we'll all look back at BC as a successful failure. Having single-handedly created a new market for crypto-coin, shocked the traditional financial players into a new awareness, and yet fizzled into history as better options come online.
What do y'all think? Possible?