Anyone who has read the book Extraordinary Popular Delusions and the Madness of Crowds
by Charles Mackay will know exactly what is going on in Bitcoin. It is the same old “It’s different this time” story. You know – only a finite amount of it issued, out of reach of the grasping hands of government etc. Those arguments were actually compelling reasons to buy it in the past, but not now it has gone parabolic and shot the moon. What the current proponents of Bitcoin don’t tell you, in addition to not emphasizing how much it’s gone up already, is that something that has gone up this much certainly does attract the attention of governments, who will eventually find a way to ensure that they do gain control and grab a slice of the pie, and furthermore, 100’s more cryptocurrencies are starting to proliferate like weeds growing in a jungle clearing, some of which must present competition for Bitcoin.
Thus it was highly amusing to see the following article appear today Due to Popular Demand, Goldman Starts Covering Bitcoin
although in fairness to Goldman, their technician pointed out that it was extremely overbought and due a heavy reaction, which appears to have started just today. Unfortunately, however, as the chart in this article makes clear, it could be due a lot more than that, as Bitcoin could well be at a final parabolic blowoff top.
Let us conclude with a succinct assessment of Bitcoin at this juncture, and hopefully you will understand the technical jargon employed – “We won’t touch it with a 10 foot pole”.
End of update.
Posted at 8.45 pm EDT on 12th June 17.