I really  like this analysis, the moment it reaches $500 at least if they are going to buy their believe in it would actually reduce unlike before.  I would have poster a picture if i had a merit to show a chart of how it was around late 2020.

Realistically speaking, if Bitcoin will ever reach $500 again, that only means one thing. There's a new "KING" in the town already.

What do I mean by that? It means there's another currency that's better than Bitcoin where investors are putting their money in already. Basically, Bitcoin will become just like what new meme coins are. They dump the coin, basically calling it a "dead coin". That's what will happen with Bitcoin if it reaches that price. Will it happen? Well, if you will look at the chances, it's almost close to 0% that it will happen because at some point, there will be investors that are willing to buy maybe at around $50,000 or around $60,000.

If it happens, I will not buy it anymore because like I said, if this happens then there must be another cryptocurrency or maybe another type of investment that exists at that time where it's enough for investors to pull out their money, and invest into that asset or currency or investment.

Although this doesn't sound realistic, I mean it doesn't sound like something that's going  to happen  but in a situation where it does, I will strongly advise not to buy because such fall doesn't enforce any form of trust, it only makes it look like gamble.  Real investment shouldn't suffer such depreciation over a short period of time, it will only  mean it's no longer safe to put in your money because a lot must have happened for such to even happen, that's over a thousand percent decrease, it's just too much, I mean enough for an asset ot a company to declare bankruptcy and liquidation of every asset they have got and possibly fold up. So if BTC ever gets to that point, most persons will quit and never investment a cent on it again.

Am not sure if Bitcoin will every reduce to the range of $500 again because it's going higher every circle. Although sometimes the price dip but that doesn't mean it will drop to the $500 you mentioned. However, if today Bitcoin dip to $50,000k many will buy with borrowed money and hold till dear life. But the fact that crypto is risky because of its volatile, so no body knows the outcome of it but based on the good reputation (results) it has people including me believes that in future it will worth more than the present rate.

The assumption is not wrong because bitcoin is indeed unpredictable so anything can happen but if there really is a drop like that, is it possible that people will believe in bitcoin again? maybe some will buy as much as they can because this is a great opportunity and maybe some will run away because their level of trust in bitcoin will be gone, this thread is basically almost similar to what I read before coming here Will you buy back when Btc reaches $3,000? But as I said this drop will never happen and I hope so.

The difference between bitcoin today and years ago is that it has a massive market capitalization of nearly $2 trillion and is slowly being recognized and legitimized globally. It is even compared to gold, an asset considered to be the best in the world. But if the government suddenly turns around and bans bitcoin again and it falls to that level, it's no longer just a matter of banning it because they can't control it or because it's decentralized...things get very serious. Or any reason why bitcoin plummeted, losing over 95% of its value, this is a warning sign about the future of bitcoin. Simply because an asset with potential and intrinsic value will never lose that much value.

So in my opinion, whatever the reason behind that drop, but if it falls to that level, it's the end of bitcoin and investors.

Everyone will still buy Bitcoin even if it is $500k but will not believe anymore if BTC reaches $500.

I would say my personal assumption is that when Bitcoin dump to $500, it means something is wrong with it or something bad is happening. And the current price is already very high and it is impossible for that to happen without something bad happening.
But if Bitcoin reaches $500k, it means that BTC adoption is increasing and has positive things in it and more investors are investing in it. Well, maybe this is a simple answer from my personal assumption.

If that situation happens with the impact of a major event, which I'm sure is not just related to the hacking of an exchange that results in bankruptcy. Then there will still be two thoughts in the market, one party will think like you, there is no more potential in Bitcoin. And on the other hand, will still think optimistically about recovery even though it will not be on a large scale. There is still a chance to make a profit even though you will not think of reaching ATH.

The next question is if no one buys it, will bitcoin touch that price? As long as there is a process of supply and demand, bitcoin will continue to be traded and no matter what the price is later because even though it has reached such a high price, there will still be people selling or buying, this is a simple formula in economics.

Why are there implications and why destroy investments just because of the increasing price. The absence of a relationship of trust regarding this and the high price of bitcoin in the future will make people compete to buy. The only worry is that we will not have the opportunity to buy because the price is getting higher and if we do not take advantage of it today, we will lose the best opportunity in the future.

firstly, it feels like your question came from your imagination as BTC to 500 will never happen again. Even if it reaches 50k, and i'd still buy it. It becomes investment opportunity coz bitcoin has limited supply, it won't be inflated.

Secondly, i believe if bitcoin reaches such price and many will even sell their house to buy bitcoin.  i've seen some who sold their house to buy bitcoin even when the price was around 20k - 50k range.

Lastly, wake up from your dream dude!. *lol Bitcoin to 500 will never ever happen again. Even when all institutional investors dumped all of their btc, it won't even reach 500.