A former hedge fund strategist who bought bitcoin at $72 is now a digital currency investor and warns a 50% drop could happen before the next big wave.

On the other hand, Dan Morehead, CEO and founder of Pantera Capital, predicted that Bitcoin is likely to spike much higher than its current prices of about $18,200 per unit last Tuesday in the long run.

Update

As of this writing, bitcoin is priced at $17,412.00 USD. It seems like it's ready to shoot back up again from a nosedive earlier. Bitcoin has been so volatile and inherently risky but those who held on to it for the long term can see the profits already.

Bitcoin's Performance YTD as per Coinmarketcap

My take on this is bitcoin is not a healthy short-term investment since it's price is so volatile and may be too stressful to watch and trade manually. Those who have millions to invest and are not worried to lose some of their money may tolerate the risk and if successful, earn many millions in the long term.

Bitcoin futures have been launched across different exchanges including CME, world's largest futures exchange. The launch took place on Sunday, a week after the CBOE launched its own bitcoin futures. It certainly fueled a bull-run but it may also be an idication that bitcoin price is becoming more and more unsustainable as more and more people go on a 'short' position. - That is to earn from a crash/price drop. Only a couple of months ago, it's on the news that a short position is too risky. Today, I believe that there's still a significant amount of risk since it's short-term unpredictable.

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Is 'overcrowding' a problem?

Traditional investors and money managers are understandably worried about bitcoin since it triggerred a buying frenzy even among non-investors. It's human nature to want to 'have a piece of the pie'. The top digital currency is the most crowded trade on the list. — which is indicative of a possibility that this popular investment could quickly reverse its trajectory.

According to Bank of America's December global fund manager survey (by Merrill Lynch) released last Tuesday, 32 percent of respondents regarded bitcoin as the most crowded trade in the financial world.

...up from 26 percent in September when the digital currency first led the list. At the time, bitcoin had surged about 375 percent for the year to $4,600. Source

Bitcoin was on the rocks in September when the digital currency briefly dipped more than $2,000 as China prohibited cryptocurrency trading and Jamie Dimon (J.P. Morgan Chase's CEO ) called bitcoin a "fraud".

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Is it a good way to go 'cashless'?

Many should say it's impractical since it changes in value every now and then, but during a bull run, one can pay their bills for free! let's say I have 9,200 PHP now. I converted it to 0.00992926 BTC. A 10% increase in value overnight may give you about 9600 back. After paying, say, your water bill (about 300 PHP), you still have more than the amount you started with. The problem is it's not easy to get the timing right so I don't bother to do that. It's just a bonus one may get for storing and using bitcoin for payments. Thus, the direct answer is: it depends.

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