Actually just over $7,000!
Traditional investors just don’t like or trust cryptocurrencies. Jamie Dimon, CEO of JPMorgan Chase, says he wants nothing to do with Bitcoin (“a fraud”) and “if you’re stupid enough to buy it, you’ll pay the price for it one day.” Ray Dalio, owner of Bridgewater Associates and the world’s most successful hedge-funder, simply says “it’s very much speculative … it’s a bubble.”
Almost as if it took encouragement from Dalio’s remarks, Bitcoin shot up Thursday to a new high of $7,354. That represents a 29% increase over the past week – an annualised 1,500%. What’s your CD paying right now? The atmosphere around Bitcoin, and other blockchain performers such as Ethereum, might be likened to a frenzied casino, although that wouldn’t be quite accurate. In a casino, the odds are carefully calibrated, and it’s rare to exit with winnings over any sustained period of time. Casinos exist because you cannot beat the house. With cryptocurrencies, the House is who, exactly? It’s certainly getting beaten, or perhaps it’s a victimless crime. Buying (not the same as investing in) Bitcoin is maybe more like buying a lottery ticket in a lottery where every ticket is a winner. Under such conditions, you’d have to be mad not to.
It’s true that after rocketing up to above $7,000, Bitcoin quickly re-entered the Earth’s upper atmosphere and fell by $650, singeing a few rookie astronauts. But it’s not a head-and-shoulders graph yet, more of a jagged, upward, ever-upward Alp. In July 2010, one Bitcoin cost six cents. We’ve since seen a 9,689,900% increase – it’s been a seven-year one-way bet. Ask Julian Assange. Back then, when the Obama administration closed down WikiLeaks’ bank accounts, Assange put everything into Bitcoin. Now he has the spare cash to offer $100,000 rewards for evidence of Democratic Party wrongdoing. If Bitcoin’s a bubble, it’s the most interesting one the world’s ever seen.