Posted: Feb 16, 2019 2:12 pm
Hermit wrote:Bitcoin traded below US$1000 for its first nine years. After a huge rise between May 2017 and February 2018 it did a few dead cat bounces, but still trades well above its initial levels.
Have you compared the charts for the December 2017 high with those of the December 2013 high? Remarkably similar in progression.
There's two ways this could go:
1) All cryptocurrency becomes worthless, including bitcoin.
2) Some crypto survives and - being close to bottom - their prices skyrocket within the near future.
Like all the other cryptocurrencies, bitcoin is backed by absolutely nothing other than expectation. It is not kept afloat by any economy or product. With tulips there was at least one tangible item money was exchanged for, and they remained at the bottom since 1637.
There are reasons why I don't like it too, primarily the energy consumption required to mine the stuff. But there are compelling reasons to invest in it I think. Not least as a store of value - a hedge against fiat, similar to gold. There are only 21 million of them (less actually, given that many have been lost).
If I had any intention of speculating with bitcoin at all I'd wait for a few more bounces until bitcoin settles down to trading around, say, the $350 mark before buying into it.
Well it's currently trading at 10 times that value. Nobody knows for sure what the bottom will be, but if it reaches 350 that will probably indicate that option 1 above is the most likely outcome.