Bitcoin is reapproaching $20,000. This was the highest value in its history. After passing this mark, the bulls expect the price to go up to the sky.

Why is bitcoin so valuable?

There is a limited number of bitcoins. According to its constitution, the number will increase by a small percentage over the years, as they are given as a reward to the miners. Apart from this reward, the bitcoin is limited.

There is now a high demand for bitcoin as a store of value. The investors believe that many individuals, corporation and funds will invest in bitcoin as a hedge against the collapse of the fiat currencies around the world, due to the huge debts that are accumulated by the national governments.

Bitcoin is not the only "store of value". In the past, many investors have used gold and silver as "store of value". There minerals are also limited in supply, although the supply can be increased through mining over time. 

While bitcoin is now the favorite "store of value", it may lose its status over time. The investors may return to gold and silver as their store of value, if the price of bitcoin goes up to an insane level.

Bitcoin is not the only crypto currency that is available as the store of value. There are many other crypto currencies in the market. While they are not as popular as bitcoin now, the situation may change, especially when bitcoin become too expensive. 

Although bitcoin may increase to a more insane level, it will not stay there for too long.

This is just my common sense view. It is a lay person's view.

I will stay away from bitcoin at the current level.

Tan Kin Lian