With the price of Bitcoin going parabolic, it’s hard to know what it is. Speaking in Hayekian terms, Jeffrey Tucker writes, “Thanks to the rise of cryptocurrency, the practical arts are being applied to reinventing money itself. It is going on every day, with thousands of companies innovating new monetary technologies.”
Meanwhile, Wall Streeter Tom Lee said on CNBC’s Squawk Box, “the mistake we made was treating it like it was a currency.” Lee went on to claim Bitcoin is “a digital store of value. A digital form of gold.”
If bitcoin captures "5 percent of just the gold market, it's $25,000," Lee added. "But 5 percent seems like an awfully small number. Let's say it's 10 or 15. Then bitcoin could easily be in the $100,000 range."
Certainly, for those of us not playing in the crypto space, Tucker provides an apt description, “It was as if a Maserati had sudden driven up alongside a fleet of Model Ts.”
To most people the academic argument of what Bitcoin and the rest of the crypto tribe are is irrelevant. Should I get in or should I wait? are the questions.
Q: Hi Bill [Fleckenstein]. Just a comment. I was in a coffee shop in downtown Vancouver and today at the "bar" by myself and two guys sat beside me. An older guy whose gravelly voice and bad moustache made me see street person and a younger millennial type guy. Couldn't help but overhear the younger guy showing the older guy his bitcoin/crypto strategy. " I'm down 50% on this one today but they always comeback". Remember when the shoeshine guy gives you market tips get out. Yikes
Fleck: It's so insane. There are so-o-o-o many warning signs, but they don't matter until they do.
Jim Grant hosted Mr. Fleckenstein on his podcast recently. When Grant expressed doubt of how Bitcoin would perform for doomsday preppers if the power grid were shut down, Fleckenstein said, “when you can overcome the intellectual hurdle that the number of Bitcoin is supposed to be limited but the number of forks is unlimited, and the number of other potential cryptocurrencies is infinite, and the blockchain is what everyone yaps about, but you don’t own it, ...you can overlook the requirement for electricity.”
Negative yields, $11,000 Bitcoin on it’s way to $100,000, “no level of absurdity seems to matter,” said Fleck.