My first and likely rare comment here on Crypto/Bitcoin.

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My first and likely rare comment here on Crypto/Bitcoin.

Crypto/bitcoin and its various derivatives have had a tremendous price run up, and then some. If you ask me today the graph on Bitcoin (just now trading around $57,200) looks tired and could well be making a rounding top.  I make no short term (or long term for that matter) predictions here, only point out some sobering thoughts, for what it’s worth. As its now clearly entered speculative territory.

Life is full of stories on greed and hope while getting blind sighted.  The geeks and nerds (not meant derogatory) are ever more getting together at the gym and juice bars patting themselves on their backs and talking up-on the continued bull run of this asset class,  as if they are the new geniuses. Few in that group dare to challenge counter points and if one does, its just brushed off, as well, “another one whom just does not get it”. 

It kind of reminds of the dotcom boom/bust of year 2000 where anybody who question it that time was told: there are 2 kinds of people: those who get it and those who don’t.  This scares me as 21 years ago older/middle age folks lived through that crash, which most of the crypto (younger) fans today have not.  There is an old Wall Street saying which goes “whenever everybody thinks the same way, not too much thinking takes place”.  Also, “don’t confuse bull market with brains”.

From here on, to me, speculating in crypto is very different then investing.  As crypto yields no income/dividends/interest and is subject to the whim of powerful regulators, big whales, dominant "seat of the pants" giti mesmerized to screen glued, traders and more, from all around the world!  Governments don’t like it as it prevents its central bank from monitoring/controlling/affecting the money supply, which is an essential & desirable economic tool; yet few crypto gurus understand this -nor want to.  As it does not support their blind belief to ever higher crypto prices.

Instead, these brush this off as a derelict control of big governments and banks which sounds good/true and fashionable, even if only partially so.  The blockchain is very legitimate and I believe in that, but at these high strato levels holding on or continuing to trade in crypto is speculating where some should now step back, get out of their box, and ask themselves: are you seeking ever higher speculations, or more tame investments.  C’est toute la difference.

Happy Easter Sunday to those which celebrate this,

Paul A. Renaud.