Can it? Yes. Will it? Who knows. Why? Because bit coins are just like regular money except you can’t really use it. Lets say I have $10,000,000 in bit coins. 99.9% of the places in the world will not accept those bitcoins as money. If I want to use them, I either have to find a place that will accept them at a reasonable rate, or I have to convert them into dollars and use those. The point of Bit Coins is that you can use them without the Government finding out, but moving $10,000,000 in any way, the government will find out. Which leads us to a shockingly simple point, Bitcoins are simply not money. They are a figment of a wish. Money has rules that it has to follow to be money. All money has to follow these rules, and if you don’t follow them, you are not money, you are something else.
1 Money is a medium of exchange. That means that you can universally use money to get the stuff you want. I can bring a dollar bill into the local 7–11 and get a snickers bar, or I can get $250,000 and get a Porsche. Money is accepted everywhere as payment of debt. The only time money is not used is when it is inconvenient to do so. The Porsche dealer will likely not accept 25 $10,000 straps of $100 bills, not because that isn’t $250,000, but $250,000 in cash causes difficulties. You have to hire guards to help transport it to the bank. The bank will likely not want it because it will have to insure that cash and a bank robbery would be a disaster. Both would much rather have a $250,000 transfer or even a personal check. Anyhow, back to the point… Since bitcoins are not universally accepted, they are not money. Gold is not money. If I have gold, I have to sell it for money in order to buy that snickers bar. The gold itself will not help me with that guy at the 7–11.
2 Money is a store of Value. If I have a dollar today, I will have a dollar tomorrow. That doesn’t mean it will buy the same things, but rather that thing called a dollar is a dollar. I can put it on the shelf and use it next week, next month, next year. Bitcoins have 2 problems with this. They are so volatile as to have no reasonable system to determine what they are, or what they are worth. You can’t store value in a trampoline. Besides that, data decays. About 10 years ago, I put all of my kids pictures into a thumb drive. About 5 years later, I wanted to look at them and they were gone. No one had done anything, the data degraded to the point where those pictures are now gone. Fortunately, I still had the hard drive from that computer, I hooked it into my new computer and was able to Download the data. I saved it. Now it’s on my computer, my father’s computer and my brother’s computer. How many bit coins have been lost to a scrambled hard drive, a bad thumb drive, or carelessness? Hundreds of millions of dollars at least. How much as been lost to Bit Coin Banks which promise to store your bit coins for you? Billions. By their nature and their lack of government regulation of how they are recorded, they are a very poor store of value. You simply don’t know if they will be there when you go to convert them into MONEY to be used.
3Money is Portable. Bit coins are portable, except when I’m at the 7–11. But I’ll accept they are portable
4Money is divisible. Bit coins meet this.
Money is uniform (each dollar looks pretty much like the others). Not applicable to bit coins, and less applicable to money since it is mostly electronic.
Limited Supply. If you believe the story, they are limited.
Acceptability. Again, a complete fail for bit coins.
Could they go below $5000? Sure. Could they go to zero? Sure. They aren’t real money. They don’t meet the definition of money. That COULD be their downfall.
It's tricky