Bitcoin has had an amazing run recently. Peaking recently at $5000, it's surge upwards has made millionaires, and shown the world the relevance of cryptocurrencies. Many people who are investing are late comers to this game, and want to make fast money because "everybody else is doing it".
Hopefully those people got a wake up call today. The price of bitcoin crashed back down to about 4500 dollars shortly after hitting 5,000. All people investing in bitcoin, whether they are new, or old hands with coins stockpiled have to understand just how volatile this market can be. For those who don't believe they could lose a huge percentage of their value in days, I suggest you google Mt. Gox.
International incidents aside, the whole concept of buying to make a quick buck quickly turns bitcoin into a massive Ponzi scheme. These people do not understand or value bitcoin for it's intrinsic qualities. Instead they buy in the hopes that many people behind them will buy as well, driving the price even further up. People have to understand that at some point, there aren't people left buying. When the growth slows, or pauses, bitcoin will be vulnerable. All the people who were simply profiteering off of bitcoin will have no emotion about dropping the currency as fast as they can. And that is likely where the next bitcoin crash will originate.
Another possible bitcoin killer comes from Bitcoin Cash. (Ticker BTCC or BCH, depending upon exchange). This coin was split off of bitcoin, and manages to be worth almost 600 dollars. If Bitcoin cash gains value, and becomes a more significant competitor to bitcoin, there is a chance that bitcoin will end up losing a lot of money and hash power to the other chain. With bitcoin currently reigning unopposed, it is easy to forget the challenges that may be presented by newer digital currencies. Bitcoin was the first. It doesn't mean it will be the last.
To conclude. Don't blindly trust. Don't put all your eggs in one basket. If markets can go up large percentages in one day, that means they can do the exact opposite the next. Does this mean bitcoin isn't a good long term investment? Does it mean that you should cash out now? Does it mean that bitcoin won't end up going up in price again?
I can't answer any of those questions. No one can. If they say they can, run, don't walk.
ALWAYS do your own research, and never invest more than you can afford to lose. There is a ton of risk in the future of cryptocurrency. But there is also a lot of promise. I want us all to make it to the other side in one piece. :)
Thanks for taking the time. Feel free to criticize, or comment down below.