There is no in-between with the world’s first cryptocurrency, bitcoin (CCC:BTC). If you somehow managed to get on board back in mid-2017 (when a single coin fetched about $3,000) or even January 2019 (about $3,500), you are either laughing all the way to the bank or the nearest private jet dealership. As I type this sentence, that bitcoin is worth some $32,200. Holy crypto, Batman!
Yet for those thinking of buying some of that screaming-hot currency now, it’s a poignant moment of self-pity.
Speaking as the guy who said to avoid bitcoin at all costs when it fetched just $700 — a seeming fortune then — banging my head against a wall simply won’t do.
I have often thought of strapping my know-it-all noggin to a cannon and firing it at a wall of diamonds, the hardest known material in the universe.
Where once a single diamond could buy a mountain of bitcoins, a single bitcoin can buy a mountain of diamonds. Still, it comes back to a question you and I surely must ponder: It is too late to get in?
People, some of them incredibly smart, thought that the various milestones of $5,000, $10,000 and $15,000 represented a ridiculous peak, but, given that it hit $32,000, could $40,000 be far behind?
Bitcoin and Going With Your Cast-Iron Gut
Make no mistake, investing in bitcoin requires a cast-iron stomach and a more chill disposition than most. That’s because bitcoin’s astonishing summits often presage meteoric falls. Like: $19,650 on Dec. 15, 2017 to $3,184 exactly one year later. Even on Jan. 21, it slid by 13% in one day. Just days before, it flirted with $42,000.
This to my mind is like gazillionaire Jeff Bezos watching his beloved Amazon.com (NASDAQ:AMZN) suddenly transform itself into a K-Mart in Logansport, Ind., and back again. If only it were that simple.
You see, compared to Bezos or even the local hardware store owner, Satoshi Nakomoto is no household name. He’s the man behind bitcoin. Or maybe the woman. Or a bunch of people. No one knows. And it’s likely we never will.
Plus the urban myth surrounding bitcoin is even stranger: that Satoshi (or his/her stunt double/triple) proposed bitcoin after buying a vintage McDonald’s napkin online and getting ripped off. Really. Yes, really.
Fast forward to 2021, and you’ll find that bitcoin still has no central government backing it. Nor can one determine its concrete value because, in the strictest sense, there’s no underlying product, rare mineral, real estate or tangible assets that support it. Thus comes the strong argument that bitcoin, much like Beanie Babies, is only worth whatever people think it is worth based on the finite number that exist.
And yet, bitcoin has lasted 11 years as a commercially usable currency. On May 22, 2010, programmer Laszlo Hanyecz used 10,000 bitcoins to purchase two Papa John’s pizzas. If he could’ve held off on his Papa John’s pizza jones for just a few hours and stashed the cyber-loot instead, that $41 ’za fund would be worth $322 million.
Imagine if he had tipped the delivery dude.
All Eyes on ‘Betcoin’
As for what else has changed about bitcoin in its recent history, investors must first know this: Powerhouse investment banks follow it closely. Not that there’s any unanimity, because it isn’t as if you can look at quarterly reports or earnings per share when making a call.
On the one hand, JPMorgan predicted on Jan. 4 that bitcoin’s price could rise above $146,000 in long term. Then you have guys like Guggenheim Partners Chief Investment Officer Scott Minerd.
He told CNBC on Jan. 21 that, “For the time being, we have probably put in a top for the next year or so.” He added that BTC could even retreat to $20,000. All at once or bit by bit?
Meanwhile, I’m thinking: Where’s that cast-iron stomach and 200x bottle of Pepto Bismol when you need it?
My bottom line is this: Bitcoin is essentially “betcoin.” The market is so rife with speculation that if the speculators magically turned into more bitcoins, the world’s supply would double or triple. But if you choose to get in on the action, there are at least a few straws to grasp.
My Bottom Line: Bet It, Forget It
First, many people are treating bitcoin like gold, a place to store value that could weather economic storms, including any stock market crash or political upheaval. Strange as it may sound, if Capitol rioters had succeeded with their violent goals…