I wasn’t at all surprised to see the price of Bitcoin slowly sliding from its August peak of around $12,000 per coin, and by the time it had dropped all the way to less than $7,400 by October, I was increasingly convinced we really were witnessing the death throes of a failed investment bubble.
Cryptocurrency enthusiasts are continually trying to pump up the value of their pretend money and bang on about how we’re sure to see Bitcoin’s $19,783 peak of late 2017 smashed… erm, some time, maybe soon. But what I’ve been watching out for is how soon will it crash all the way to zero.
Well, maybe not zero
It probably won’t fall to literally nothing, as there is a genuine value in an unregulated and anonymous means of payment. But I reckon it’s a lot less than the Bitcoin bulls claim. And as an investment, I’ve always agreed with Warren Buffett’s description of Bitcoin as rat poison squared.
But in the past week, the price of Bitcoin has soared again, jumping from those $7,400 levels to spike over $10,000 on 26 October – you could have made a 35% killing in just a few days if you’d ignored the sourpusses like me and filled your boots.
Though it’s fallen back a bit since that high, we’re still looking at more than $9,000 per coin as I write. So have I been wrong all along, and is there a Bitcoin resurgence happening?
To answer that, we really need to unearth the reasons for the sharp late-October rally. And you know what? I can’t find any rational explanation.
Blather and waffle
All the crypto-bull sites are talking about is price charts and patterns, about what so-called support levels need to be maintained to prop up suggestions that the 2019 price slide has been halted, and what breakthroughs must be achieved to confirm there’s a new bull run in the making.
I’m reading talk of falling channels, of what investors need to see in the next 24 hours (yes, 24 hours, as if that makes any difference to people investing for their long-term futures) and claims of how many consecutive days of whatever closing levels are need to confirm… something or other… bleurgh.
It’s all utter nonsense, bilge of the most worthless kind, unsupported by any kind of rationality. The recent rise? I say it’s just a dead cat bounce, and I remain convinced that investing in Bitcoin is for mugs.
By all means have a small punt if it makes you happy, but be honest about what it is – it’s a gamble, not an investment.
Real investing
So what should you do instead? I might be boring you, but I’m going to repeat one of my favourite investing statistics of all time. If you’d invested £100 in the UK stock market in 1945, it would have soared to £180,000 today, even after inflation.
Is Bitcoin going to do that for you? I don’t think it has a chance of coming close. In the years to come, I reckon Bitcoin is going to be relegated to the long list of irrational get-rich-quick crazes that never worked. And I’ve put my money where my mouth is, by investing my long-term cash in dividend-paying UK stocks.