Just when you think the bitcoin bubble has burst, the 1-day 20% decline down to $9000/BTC immediately recovers 1 week later to $14,360/BTC……a 60% gain in just 7 days as of now!
To borrow a quote from the movie “Spaceballs”, bitcoin “has gone plaid!”
Or, as they say in the financial world, the chart has gone “vertical”. It no longer slopes up to the right, but instead is heading straight up.
Bitcoin’s meteoric price rise now makes it one of the world’s biggest financial bubbles of all time, and possibly the biggest. As a result, anyone who puts money in this thing now may want to consider Las Vegas instead. It has become a gamble that may pay off quickly, or could cost you everything you speculate quickly.
That being said, Alan Greenspan, former Chairman of the Federal Reserve, stated today that bitcoin was like American colonial currency that would eventually become worthless. I couldn’t disagree more with this statement!
Colonial currency was a “fiat” currency, backed by nothing other than a government dictate. The government could print all they wanted, and did so to pay for Revolutionary War supplies. By this definition, the dollar should be worthless too!
Bitcoin on the other hand has its supply limited by an unbreakable computer formula. The maximum amount of bitcoin that can be created by the computers is 21 million coins. Like gold in the ground, there is only so much bitcoin that can exist. Also like gold, its natural scarcity is what provides the value.
For this reason, in spite of the bubble its currently in, bitcoin should be around far longer than colonial currency ever was!
Bitcoin has the added benefits of being the world’s first true, anonymous (if handled correctly), cross-border, currency having the lowest transaction costs in history. It does not require a banking system, nor a government. Buying with bitcoin is as if I handed you an ounce of gold. There is no way to track the transaction, and it can be anonymous. For this reason, it has a lot of governments, and a lot of banks, VERY VERY nervous!
One of history’s famed bankers, Mayer Amschel Rothschild, once stated, “Permit me to issue and control the money of a nation, and I care not who makes its laws.” Should bitcoin become universally adopted, as it appears it is, it will completely strip away the financial power of governments and banks! This is bitcoin’s greatest appeal, and why so many bankers like Alan Greenspan and Jamie Dimon are publicly suggesting it is a fraud.
It is a better controlled currency than the dollar. And yes, it IS currently in a MASSIVE bubble. I thought that bubble would have burst by now. When it does finally burst, bitcoin will probably be recognized as the 21st century’s greatest creation, freeing all from the financial tyranny of manipulated currencies, government power, and banking control. Also after the bubble bursts, bitcoin should provide a good store of value, a lot like gold.