Sure, I follow the currency and commodity markets on a daily basis as part of my professional activities. And you're right, prices are at ridiculous highs, for now anyway. As is the case with any fiat currency (one that has no intrinsic value, and is not backed by a hard commodity like gold), market value is simply an internal supply / demand function, so trade volume is critical, and is driven by different things. In what I would call a more "mature", or "stable" market for a currency like this, trading volume is primarily driven by a need for the currency. In the case of Bitcoins, that need is to convert dollars into the cryptocurrency to complete transactions on platforms like SR that require its use. Obviously, SR transaction volume was completely cut off, at least for a time, and while I don't their current status, the volume must be dramatically lower than before, even if they are back up. Anyway, I digress, so to get back on point, the moral of the story is that despite there being far lower need for the currency at present, trade volume remains high, sustaining prices. So, what causes that, you might ask? The answer is one word. Speculation. I've been following the personal blog of Bitcoin's creator, and it's well known in financial circles that those with substantial stakes in the Bitcoin industry (exchange services, etc) are doing everything they can to generate buzz and keep speculation activity high in order to keep prices propped up.
Anyway, while all of that is great, and are normal activities in any fluid market, there is tremendous risk in speculating on any financial asset with no intrinsic value (see fiat currency above), and even more so on one where future demand for the currency is in serious doubt. A counterpoint example would be US Dollars. While also a fiat currency lacking intrinsic value, there is obviously significant demand for US Dollars, simply by virtue of the fact that it's the currency of a world super power and, at least at present, the world's "reserve currency". Obviously, no such inherent, ongoing demand is present with an alternative currency like Bitcoin, so its up to the creators and stakeholders of the currency to facilitate demand by working to encourage development of platforms that require its use, like SR for example.
In any event, your point is well taken, and yeah, I wouldn't mind at all, had I invested $5K in Bitcoins when they were at $5.00. Would have made for a very happy holiday season, that's for sure! That being said though, I wouldn't touch them with a 10 foot pole at current prices. There's just nothing there to support that valuation level going forward. Just pure speculation volume, which will ultimately fall off, and when it does, it's going to be a very fast, very steep fall. Always remember this quote that one of my finance professors told us back in college:
"The time to buy is when there is blood in the streets", which means that the last time you want to be buying is when everyone else is. When the bottom falls out and everyone is losing their collective arses, THAT'S when you want to start buying. I'll see ya down around the $20 mark. /default_biggrin.png