Bitcoin's price is skyrocketing because of high demand and low supply. But as Bitcoin's total value grows, the risk of a selloff increases -- and that risk may spread to other markets.
I am not rooting for Bitcoin to fail and I am not predicting an imminent crash in Bitcoin's value. It's clear that more people want to buy Bitcoins than sell them right now; that will drive prices higher (look at the ratio of buy vs. sell searches in Google Trends.) But as Bitcoin's total value grows, I believe the risk of a selloff increases -- and that risk may spread to other markets.
I think Bitcoin's price will fall sharply one day, but that doesn't mean the cryptocurrency is doomed to fail. The U.S. stock market fell by 90% and bounced back stronger than before. Bitcoin may be just as resilient: Its a global currency that has a purpose beyond speculation.
Someone living under an oppressive government may have good reason to transfer his or her assets into a portable format. (Gold once served this purpose, but it's size and weight made it impractical.) Cryptocurrencies may follow the same boom, bust, and gradual adoption cycle that so many new technologies did in their early years.