Common Sense Living

Bitcoin: SELL! SELL! SELL!

When I first wrote about Bitcoin on September 24th, it was trading at $3,661 per coin.  Last night, only 2+ months later, it crossed the $10,000 threshold, and this morning it is up nearly another 10% overnight threatening $11,000 per coin.  Needless to say, Bitcoin is in the latest stages of a bubble, and we are days if not hours away from it bursting!

This week, one of the most popular searches on Google was “how to buy bitcoin with a credit card”.  This scares me more than anything!  Bitcoin has about a $250 Billion market cap, and to think that most of that is caused with credit card debt means that when the bubble bursts, there are going to be a LOT of defaults on credit cards!  This is how a seemingly harmless financial asset like Bitcoin affects the real economy!

If you own Bitcoin, NOW is the time to exit….BEFORE the bubble bursts.  Also, do not leave your money in the bitcoin exchanges…..even in the form of dollars.  Should Bitcoin fall very rapidly, there will not be enough dollars to cover dollar withdrawals.  This will be a classic Bitcoin version of a “run on the banks”.  Bigger than the Tulip bubble.  Bigger than the South Seas bubble.

I suspect Bitcoin could see an initial very fast drop of perhaps 30% to 50%, before eventually falling by 80% to 90%.  Buy real gold instead.  I am staying away from stocks and bonds, as the  stock markets are also in massive bubble, as are the bond markets.

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