I appreciate your blog post. I do think that bitcoin is in a bubble, but I'm not terribly upset about it. I think of transaction activity as the 'fundamentals' driving bitcoin. In the long run (ex-speculative activity) the price of bitcoin will be dictated by the amount transacting participants need to hold as reserves for day-to-day activity. This will vary by the actual use cases.

There is a rubber-band relationship between fundamentals and speculation. Solid improving fundamentals drive speculative activity to a certain point, and then price momentum drives it still further. If price action gets too far out of reach of fundamentals, the rubber-band will eventually snap back, and there will be a big pull-back in price. If the pull-back is severe enough, the price momentum will start working against it again and fundamentals will improve faster than price. Eventually the improvement in fundamentals will outpace price movement enough that accumulation to support use-cases will start to create positive price momentum and the cycle starts over.

Right now I think the dominant factor is the prospective futures contract in bitcoin. While there will be some 'arbitrage' activity aligning the futures with bitcoin, most of the trading will be USD-settled, meaning you won't have to own bitcoin to speculate in bitcoin. I actually see that as a negative for fundamentals, so positive price reaction is somewhat misguided.

But full disclosure: I'm long bitcoin and have barely trimmed my holdings on the recent price action, since I think the long term bullish case outweighs the short-term fundamentals. I wouldn't want to sideline for the correction and miss part of the run-up because my timing is wrong.

I'm also long Steem and have more in my bittrex account than I have on the blockchain in my own wallet.