On December 18, 2017, our office posted an article titled, “What to Make of the Rise in Bitcoin and Other Cryptocurrencies?” On the previous day, Bitcoin reached an all-time high of nearly $20,000 – a price it has not seen since. During this time, the discussion of Bitcoin grew to such a frenzy even my 33 year old son and the gal who cuts my hair were asking if they should get in on it. This reminded me of the greed disease in one of Warren Buffett’s quotes:
“Occasional outbreaks of those two super-contagious diseases, fear and greed, will forever occur in the investment community. The timing of these epidemics is equally unpredictable, both as to duration and degree.”
Monday, September 17, 2018 marked the nine month anniversary of Bitcoin’s all-time high. On that day, the closing price was just above $6,200 representing almost a 70% loss over nine months. Possible reasons for this decline include increased regulation, reduction in transactions, fear of hacking, and lack of support from the established financial world.
Nowadays no one asking us if they should get in on it. As with most investment bubbles, greed is the insidious inflator and fear is the devious deflator. Some pundits think the price has stabilized while others think there are darker days ahead.
Personally, I have a very difficult time investing in something my small brain cannot remotely understand as well as, when I hear of cryptocurrency miners, I envision the Doozers of Fraggle Rock.