How? Which investors are going to believe the next bubble isn't a bubble?
That said -- eventually the price will drop to the point where the price is entirely driven by Bitcoin's natural customer base -- tax cheats, money launderers, drug dealers, etc, and will probably in fact over correct.
Just for the sake of argument, let's said that 'natural price' is $500 or $600 a bitcoin -- it bottomed out around $300 last time and we've had a 'halvening' since then. So let's imagine the price drops down to below $1000, and stays around that range for a year or more. Then a new halvening happens, the price doubles to $2000. Maybe someone figures out how to do something useful with cryptocurrency? 3-4 years from now, people will have already forgotten about the last bubble and might FOMO again. Bitcoin has a long history of boom and bust with each boom being bigger than the last. It won't take much to convince people that another boom is on the offing.
Funny I should read your comment about Bitcoin's use for criminal enterprise after I read about Goldman Sach's alleged hand in a multi-billion dollar fraud in Malaysia, or Deutche Bank's multi-billion dollar money laundering. Or going back a few years the Panama Papers and that entire underground financial apparatus that drummed up exactly zero long term outrage or changes. I'll be more inclined to believe crypto is only for thieves when you convince me that the existing financial system isn't also completely rife with thievery and cheats.
Still, I agree with vkou:
> Ransomware authors, heroin dealers and money launderers don't care how much BTC is worth - they only use it to cash out into USD. For them, the spot price is largely irrelevant.
That is, they'll still want to use Bitcoin, just not necessarily care about the spot price. The price is, I believe, driven up by gamblers.
Nailed that one.
All their prices are denominated in USD, all they care about is that the exchange rate is stable. As for the launderers, you can launder money with BTC just as well when it is $3/coin, as you can when it is $3 million/coin.
I think the key is more to buy in early rather than near the top. Indeed if you time that ok you can sell half your stake when it goes 2x and so be kind of risk free for the rest.
If history is a guide bitcoin will go nowhere for 6 months to a year, then up up slowly, then have another silly bubble a few years later. So my infallible guide is buy in a years time, sell half when the price doubles, wait till there is a bubble and when it's super hyped but starts crashing sell out, probably about 1/3 below the next peak.