Whilst i understand people the limited number of bitcoin that can be produced creates a 'value' and the price is increasing based on people speculating about what they might be worth in the future is driving the price up, what i dont understand is why is bitcoin seen as so much more valuable than eth for example?
As btc isnt anything tangible (like gold) presumably its value is defined by what it can buy? If vendors started to accept eth, ltc etc as well as btc why would the delta in value between btc and others exist? What makes it special?
Incidently i threw about $1,000 at eth, ltc and gnt earlier this month just to play around and wish i done more.
I am offering full disclosure that I am no expert on the topic, but I have theories based on the research and studying I've done and what I already knew about blockchain prior to buying in.
1) BTC is the original digital currency and has the most awareness.
2) The cap is lower than most any other coin at 21mil.
3) It is the most accessible and every exchange and wallet supports it.
4) Merchants have begun accepting it more and more.
5) It was originally designed as a currency to spend but now has been realized as a store of value. The transactions are slow and expensive, which makes it a poor choice for day to day use for currency. Other alt coins are much better and scale to offer benefits for this. So the holding (hodl) of the bitcoin increases it's value. When people sell them off, then the price drops. When people buy and hold, it increases.
With the mining algorithm becoming increasingly long and complex, it will be slower and difficult to approve further blocks and support the holding of them and not selling. Combine this with the beginning of mainstream awareness and acceptance. This is in part how the "experts" are predicting $50k, 100k, 500k per coin in the next 5-10 years.
We are in the early adoption phase regardless of the price. Next year at this time people will say, "I wish I got in while bitcoin was cheap at $10k". But, I really recommend diversifying and reading up on alt coins. They can make you some really nice money.
On top of the coins I have mentioned before, I would recommend anyone looking at alt coins to look at Waves. I think they are on to something big, they are Ethereum based, and gaining acceptance. Last year they were .16 each and now at about $5 each, but I really feel they could be $100+ each before long. I put $1k on them today and gonna see what happens.