While checking-out of a DIY store over the weekend I overheard two young cashiers talking about investing all their savings in Bitcoins. I was concerned.
The price of bitcoin hit a new high of $57,505 nearly 6 times its value one year ago.
In 2017, Bitcoin prices climbed 15-fold, before bubble proved unsustainable,
bitcoin’s price crashed 80% by the end of 2018.
Is bitcoin “a lie,” or “the stimulus asset”?
Is bitcoin “a lie,” or the new “safe-haven asset”?
For me bitcoin is the new obsession.
In the light of modern obsessions that have very wide interest and social impact it is quite fascinating to look back at past examples and to do so from a point in time closer to the events than we are today. I recommend all my readers to read Charles Mackay’s (1841-1889) classic book, Extraordinary Popular Delusions and The Madness of Crowds.
Recently whilst reading an article in Forbes a statement which alarmed me was “heightened government spending could spark problematic inflation and tank the value of the dollar while boosting safe-haven assets like bitcoin and gold.”
How can Bitcoin be classed as safe haven asset?
John Kenneth Galbraith, Economist once said “There’s nothing unique about this. It is something which happens every 20 or 30 years because that is about the length of the financial memory. It’s about the length of time that it requires for a new set of suckers, if you will, a new set of people capable of wonderful self-delusion to come in and imagine that they have a new and wonderful fix on the future.”
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