I agree, the true value is next to nothing.

I'm secretly hoping it crashes under $20, even though I still think that's overvalued, it's low enough that it would rise again from that point I think. If it drops below $10 I'd honestly buy a grand worth. That's 100 BTC, if it even go to $20 again I'd make a quick grand. But at these current prices? No way, it's a fools bet. Sure, some people are getting rich quick off it, but it's still way too risky for my tastes. It's true value is somewhere between $1-$5 in my opinion.

Like you said, it lacks purchasing power, and if I'm not buying drugs or other illegal contraband, why do I care about it's anonymity? I simply don't. It won't pay my mortgage, or my bills, or anything important unless I convert it back to USD. And since it's constantly changing what it's worth in USD, it's silly to hold it as a usable currency. The only reason I'd even consider holding them would be as a temporary investment with the hopes of selling at a higher price. And that's how the vast majority of it's participants are using it, as a speculative commodity for return on investment, and that makes for an AWFUL currency as far as utility goes.

The people who know what they are doing will come out of this fine, the people who think it's rising in price because it's so edgy and useful are going to end up sad, broke, and with a good life's lesson under their belts.

Also, two words no bitcoin believer wants to hear: Government Regulation. It will happen at some point, and since it can't be regulated, look for making it illegal. It's already illegal to circulate paper currencies that compete with the dollar, it's only a matter of time til that legislature gets updated to include digital currencies. People can't just be making money hand over fist and avoiding taxes. The government WILL do something at some point, and it will destroy the bitcoin market back to underground where only people who buy acid on the Silk Road will be using it again.