From Jamie Dimon to top hedge fund managers, many experts have been predicting the fall of Bitcoin any moment now. To assess the risks to Bitcoin, experts are applying a general framework that considers economic bubbles and what drives their behavior.
Some factors that could diminish Bitcoin’s perception and crash its price could be:
Regulation can’t stop Bitcoin, but it can stop liquidity entering Bitcoin. If large scale institutional money is restricted from entering cryptocurrencies (the global derivatives market is worth $1.2 quadrillion - see image below), then Bitcoin will eventually reach a peak and that will cause a selloff
Scams (pump and dumps/frontrunning) in other crypto assets will undermine faith in the industry as a whole, preventing true mass adoption of all cryptocurrencies. Bitcoin will be tarred and feathered with the same brush attached to other crypto projects
ICOs are being used by concepts that have no need for blockchain technology. This could breed resentment and scepticism from investors about the concept of blockchains.
Blockchains are still unproventechnologies. The cracks in the road that we have seen from hard forks and fraud will lead to inevitable future crashes.
For an in-depth look on the ‘downside perspective’ on Bitcoin and cryptocurrencies, which draws upon some historical comparisons, please refer to this article