Bitcoin is going to crash according to many and this crash is going to be triggered by Mt. Gox who are about to unload a massive chunk of Bitcoin and Bitcoin cash to creditors. This 160,000 chunk of coins is going to thump the market and bring it to its knees.
Crypto has coined and co-opted a whole new lexicon, one worthy of the Millennial generation that is adopting crypto as an alternative to old-fashioned ‘fiat.’
‘Fiat,’ for one, is a new word for most. It’s a sneering point of view that looks at government money and says it is garbage. It isn’t of course, and you cannot buy a Lambo with Bitcoin but you can with dollars.
Then there is FOMO, ‘fear of missing out.’ The Bitcoin bubble was driven by copious ‘FOMO.’ Bitcoin, ether, litecoin made a lot of people a lot of money fast and millions wanted a piece of that and piled in driving the bubble. The market went vertical and the old hands and cautious sold. A few said, like myself, Bitcoin futures, bye. Others saw the vertical chart and went, cash me out dealer.
It was the right thing to do and will always be unless you are the guy that sold at $7, $300, $2,000 a Bitcoin.
Hodl is what you need to do, if you can’t spell ‘hold’; you still need to buy and hold, even as your exotic crypto coins turn to ashes in your hands. It will all come good, just come back in a few years, like an investor in Enron.
Then there is moon. Mooning is not showing your buttocks, it is the act of a crypto currency going from nothing to a huge sum. Buy 10,000 ether for a few thousand dollars and come back in a year or two a multimillionaire. We all pray for the moon and many have landed on it by happy fortune by being taken up by the potential of cryptocurrency.
I was in a cab in 2013 and the driver said he had bought Bitcoin in 2010 and realized the week before it was now worth something, approximately $100,000 he said, he undoubtably found his private keys and sold at $1,000 like any sane individual. He was probably a very sad cab driver this Christmas and a little less sad now.
Mooning happens: Bitcoin went from $1 to $20ll.000, Apple from a few adjusted cents a share to a trillion dollars market cap, Ether went from next to nothing to $1,200 a coin. The percentages just don’t make financial logic and if you get FOMO, you plow your ‘fiat’ into any old crypto coin, likely the one closest to hand, and end up Hodling the ashes of your rash investment forever.
But this is just FUD.
FUD: Fear, uncertainty and doubt. An old 1980s marketing technique to throw competitors off the scent and customers off buying competitors’ products. FUD is the reason prices fall, while FOMO is why they go up. The greenhorn Millennials praying for their Lambos say, “Don’t listen to the FUD, Hodl, it is going to moon.”
It might, it really might, but all the acronyms in the world won’t make it so.
So FUD says Mt. Gox’s billion dollars of Bitcoin will crash the price.
I hope so, I really do, because I’m still waiting for some cheap Bitcoins; $2,500 a coin is cheap enough for me.
I’m still waiting, because $1 billion of Bitcoin will evaporate in a week or two of selling. $2 or $3 billion of Bitcoin gets transacted a day, though you might imagine a lot is just froth, washing back and forth across exchanges. However, the flows of Bitcoin are not complete fantasy, you can see it in the blockchain; a lot of money is flowing around the globe, dubious exchange volumes or otherwise.
Already 82% of all Bitcoins are mined and around May 2020 new supply will halve.
You can love or hate that, but Bitcoin is solid deflationary money. We shouldn’t hold the ‘digital gold’ moniker against it. Bitcoin is a global currency, with increasing acceptance, a huge brand up there with Trump and the NFL, a global audience and a record of appreciation.
The downsides are clear: lack of practical security, inflammatory advocates who can’t keep their big mouths shut and just take care of business, and the army of criminals trying all avenues to steal Bitcoin from anywhere they can. Bitcoin needs banking like wild west banks need vaults but no one has come forward with a solution because the old folks fear what Bitcoin could be, a financial virus that could wipe out a financial center faster than a Brexit.
Five percent of Bitcoin’s volume a day should evaporate the Mt. Gox overhang in days and there will be a lot of people with their buying hat on to catch as much Bitcoin as they can afford. Bitcoin cash should get absorbed even faster. Then again, what if the Mt. Gox victims Hodl their reinstated coins? What will the overhang be then?
But you never know, in the wild west it doesn’t take much to create a stampede. I for one welcome one because if the herd wants to jump off a cliff, I’m going to start a hamburger joint at the bottom of it.
Bitcoin has held up very well these last weeks, but I still can’t imagine we haven’t had the final…