A week ago when Bitcoin was at $9,000 I wrote:
Bitcoin is above $8,900 after falling as low as $7,400 a few day ago. My take is, it goes lower, especially because Tom Lee refuses to shut up. Here he is again. He’s now been on on CNBC over six times since December to hype Bitcoin, and every time it has gone lower. More evidence the financial media is useless by hyping bad investments. I still have 20% of my original Bitcoin position.
And sure enough, bitcoin has fallen $1100 since that post:
The reason has NOT to do with Binance but rather that Bitcoin is little more than a digital version of a Fabergé egg or a beanie baby.
In the late 90’s collectors considered beanie babies a store of value and hoped to retire off them by selling the plush toys to someone else at a higher price, but the overwhelming majority of collectors found themselves with nothing more than a pile of worthless toys when the fad ended.
I don’t think Bitcoin will end that badly but I predict a decline to the low $100’s or so. Considering that most people who own Bitcoin bought in mid to late 2017, a decline to $200 would mean 90%-99% losses for those people.
Many of the people who hyped Bitcoin on Twitter and elsewhere in late 2017 to early 2018 are nowhere to be found. Either they sold, lost enthusiasm, or have lost a lot of money.
A Fabergé egg is a jeweled egg created by the House of Fabergé. Virtually all were manufactured under the supervision of Peter Carl Fabergé between 1885 and 1917. The most famous are those made for the Russian Tsars Alexander III and Nicholas II as Easter gifts for their wives and mothers (though these were not the …
That’s sorta similar to Bitcoin as it pertains to its limited supply and how all coins will be mined by 2100. Or Hummel figurines, baseball cards, or any other collectible fad that was hyped on purported rarity but proved to be a poor investment. Just because there is a limited supply does not mean it’s a good investment.
Meanwhile the S&P 500 has fallen from 2700 to 2580. I expect it to rebound to 2780 soon. To reiterate, the Trump tariffs and ‘trade war’ will not have any meaningful economic impact despite all the media coverage. Trump does not want a trade war and neither does China, as nether side stands to benefit. It’s mostly just posturing from both sides.