The rise could be sustainable if the ecosystem around Bitcoin really expands.
As I explained some posts ago, this would occur if there are more use cases. For example, remittances is one of the fields where Bitcoin has extreme potential, because the volatility risk is much lower there as with most other applications (because the user only needs to "hold" the coin [and hold the bag if there is a crash] for some minutes, while the transaction is being confirmed). If there are more remittance operators available, and Bitcoin will be massively used for that, this would be reflected in a "sustainable" price rise.
But currently this "real adoption" still is limited - so it's perfectly possible that the current market cap is "overvalued" if we take into account the really existing current Bitcoin ecosystem. And so "Grandma and her dog" could get burned
I agree. Reworld uses cases are necessary to sustain BTC long term and at the moment it must be over valued.
Sending money is an easy early uses case, but it's not clear what it might take to get crypto more widely adopted.
I was chatting to a local organic farmer recently about whether they would be interested in starting to sell their produce in BTC. I think the idea is interesting, but as most consumers aren't using BTC they unlikely to adopt. It will take time for ordinary people to get used to managing their funds and feeling safe doing so. No doubt there are more software innovations needed to really make this happen.
The other thing is money creation. Now we have central banks and commercial banks creating money (as debt) and feeding it down to companies, who use it to pay staff. This creates massive stability (inertia?) in the current system. It seems much more likely that an alternative crypto-based economy grow in parallel to this old paradigm, without some major innovations this can only happen very slowly in the margins and it will take a long time to gain critical mass.
Perhaps one day noone will ask how much a bitcoin is worth today. Rather they will ask how much a USD is worth today. But the truth is this could take long time.
If BTC crashes it could go down like the nasdaq in 2001 and take quite a long time to come back up. I think it will. If I can a stash of bitcoins, I'd definitely hold some right now, but I'd also be looking to divest some into safe stores of wealth.
I agree with just about everything you wrote, but want to highlight the bolded section. It seems to me that this is an impossibility, because nobody can afford to transact in btc or store value in it with such volatility. Any producer or merchant accepting btc as a payment option has to immediately convert the transaction into fiat or risk having their profit margin eaten away by the volatility. It seems impossible to me to have a parallel btc-denominated system grow along side the fiat-dominated system because everything to sustain a btc-only system is not produced presently. There will still be points where btc has to be converted in order to interact with the larger economy, and god help you as a businessman if btc is in a down period when you have to buy new supplies, because all the transactions you would have done in btc over the previous period would now be at a loss.