The Crypto Tripup
To assess the risks to Crypto currency, I am applying a general framework that considers economic bubbles and what drives their behavior.
Some factors that could diminish Cryptos perception and crash its price could be:
Regulation can’t stop Bitcoin, but it can stop liquidity entering Bitcoin. If large scale institutional money is restricted from entering cryptocurrencies (the global derivatives market is worth $1.2 quadrillion - see image below), then Bitcoin will eventually reach a peak and that will cause a selloff.
Scams (pump and dumps/frontrunning) in other crypto assets will undermine faith in the industry as a whole, preventing true mass adoption of all cryptocurrencies. Bitcoin will be tarred and feathered with the same brush attached to other crypto projects
ICOs are being used by concepts that have no need for blockchain technology. This could breed resentment and scepticism from investors about the concept of blockchains.
Blockchains are still unproven technologies. The cracks in the road that we have seen from hard forks and fraud will lead to inevitable future crashes.
The real danger associated with investing in Crypto (and other blockchain solutions) is that cryptocurrencies are continuing to evolve.
New technology has been introduced that will, I believe, make many or most "blockchain" applications and cryptocurrencies obsolete within a few years. That new technology scales better than blockchain, is faster, requires less energy, and has no transaction fees. That new technology uses a "tangle" instead of a blockchain, and can be found in the IOTA cryptocurrency.
Cryptocurrencies, as a class, are not going away any time soon. In fact, I agree with Steve Atkinson's opinion that Bitcoin is a "virus" on the world's financial markets, and that it will continue to grow until it consumes all of the available resources. (Is the Bitcoin bubble about to burst now that it is approaching the 21 million mining limit?) The only distinction I would make would be to substitute the word "cryptocurrencies" for the word "Bitcoin".
The question I think you should be asking is "Can the Bitcoin 'virus' out-compete the IOTA 'virus'?" "Can ‘blockchain’ applications and coins survive in the same environment with ‘tangle’ applications and coins?"
In my opinion, blockchain is a "dinosaur" that will eventually be driven to extinction by the agile "mammal" called "tangle". IOTA has already risen to be the fourth largest cryptocurrency by market cap. (IOTA (MIOTA) price, charts, market cap, and other metrics | CoinMarketCap)
More information on IOTA and the "tangle" can be found here: IOTA - Next Generation Blockchain