Dear Cryptocurrency Investors:
You are a big audience. That means we might get bigger?
We’ll start with a little speculation, John McAfee style.
If Bitcoins are $1,000,000 each by the year 2020, here is how the chart might look, if charts had straight lines.
(Come back and look at this in a year.)
Curse McAfee if he’s wrong.
That will mean the total capitalization of bitcoin would be approaching 20 Trillion dollars – if bitcoin can go this high.
It would be a 100-fold increase if it did.
Talk about irrational exuberance. I think people would almost consider a McAfee diet if bitcoin does value at a million bucks per.
Currently, the US debt is about as much as what bitcoin would be worth, as a whole, in this year 2020 scenario: 20 trillion clams.
Let’s back track though. Get our bearings.
Bitcoins were about $400 each, two years ago. I got nervous then and sold some — after reading some bubbly stuff. Dumb mistake.
They grew 25-fold by 2017 – to more than $10,000 each. That has apparently surprised a lot of people and fresh bubble calls are in vogue again.
I mean seriously, did you expect this?
How about awareness?
Estimates put awareness of bitcoin (in the US) at about 80%. (Maybe.)
In 2013, awareness was half that number – in the US. Around 40%.
But awareness and ownership are different animals.
India is far more aware of cryptocurrency today, according to some reports.
Of Americans who are aware of bitcoin (cryptocurrencies) only about 14% actually own any.
That’s about 35 million Americans who own bitcoins. (No wonder the IRS is complaining they can’t steal enough money!)
Translated? About 1 in 10 Americans owns crypto.
Now, using Joe Kennedy’s rationalization – listen to the shoeshine boy – for getting out of the stock market before it tanks, just prior to the Great Depression, are we near a bubble – now? But remember, Joe Kennedy shorted the markets back then. And he made a bundle. He did not get out of the markets.
So, the allegation today, that everyone is talking about bitcoin and this will be its downfall, seems to fall flat.
I’ve asked my financial planner (US-based) if anyone has asked him about bitcoin – really wanted to talk about it – and he sees the high dollar investor types all the time; and he said that virtually none of his clients talks about it. They may mention it in passing, but they are not serious about it. His investors are after real investments, he advised. Safer and better. Bitcoin is a confusing mess at tax time – in the US.
And if that is the “tell” – everyone is talking about it – then I’d have to ask you where you are. Because in my neck of the woods (Florida), few make mention of it. No clerks or cell phone sales guys. No neighbors or bus drivers. I often ask them, just to have fun. Most just stare at me.
And bitcoin signs? Billboards? Darned few around here. Maybe some local radio announcer gives his take. Or maybe I should get out more.
Additionally, all the classic bubble burst models I’ve checked show 10 to 20% drops in value and then crashes – not to the floor, but maybe to the 20% – 40% level.
Bitcoin has been swinging like a drunken sailor since day one. And then recovering. It does not appear to listen to the bubblers. Or not yet anyway.
Do I think bitcoin is magic? Don’t be silly. But I do think we need some new bubble models on this one. All the old earmarks seem wanting.
And maybe the gurus of the bubble will need to rewrite the business books after a few more years of growth. This time, using a model that accepts that crypto is a money replacement and not a stock.
Oh, the shock.
But I could be wrong. Being a pessimist at heart – skeptical – I’ve been waiting patiently for the Great Bitcoin Crash, so I can tell all those nasty Bitcoin Rich guys that I told them so.
In the meantime, just on the outside chance BTC’s go to a million each, I don’t think owning a slice is a bad thing.