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Do Not Let Recent Gains Fool You. The Bitcoin Bubble Could Implode at Any Time
You’d think people had learned their lesson about cryptocurrencies—especially, Bitcoin—but no. Rather than pull away from the insidious presence that Bitcoin represents among “investment products,” some still believe it’s going to $50,000 in 2018. And after that, it’s going to the moon, via Mars. The fact that just two months ago, Bitcoin was trading as high as $19,551, only to drop to below $7,000 was not a sufficiently strong lesson, apparently. The Bitcoin bubble remains.
It’s hard to believe that, clearly, Bitcoin can still draw the speculative crowds. Instead of letting it fall and saving their money or putting it somewhere safer—like a bathtub surrounded by electric hair dryers—they decided that Bitcoin remains a great opportunity. “Why it must be better than gold!” must be the investment philosophy.
It’s like catching a friend or employee stealing money from your wallet in flagrante delicto, pausing, and then handing them the keys to your car and your house. It has to be both, of course, because losing on Bitcoin is no laughing matter. Imagine those illuminated folks who bought Bitcoin at $15,000 or more. Still, mockery and sarcasm aren’t going to get to the root of the issue.
Is Bitcoin Worth All the Risk So Many Are Taking?
Or is it better to take your loss or profit and walk away while you still can? After all, if you are one of those investors who’s still capable of critical thought, you’ll have fair concerns about the health of the financial markets now. Perhaps you’ve considered investing in gold, which is performing much better than expected so far in 2018.
The price of gold per ounce has now comfortably settled above $1,350. And the gold price is often a barometer of stock market sentiment. When it goes higher, volatility and fear are high, raising the chances of a stock market crash. Therefore, the instinct to consider Bitcoin and other cryptocurrencies make sense. But, only the instinct.
Even based on the price of Bitcoin at the time of writing (about $10,115) it will have to move almost 100% to resume trading at its record high. As for other cryptocurrencies, they too have dropped by similar triple-digit percentages from their highs.
Ethereum dropped by about 50% in the same period when Bitcoin was freefalling. But in the case of Ethereum at least, which was going for about $935.83 at the time of writing, the losses were in the hundreds or tens of dollars. Losses for those who bought bitcoins (the currency/coins, when written with a lowercase “b”) in the last quarter of 2017 are still untenable, even as Bitcoin has crossed the $10,000 resistance ceiling again.
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