As Bitcoin Surges To New Record Highs, 5 Lessons For Every Crypto Investor

Friday, December 15, 2017
By Paul Martin

by Tyler Durden
Dec 15, 2017

Once again the stories of the death of Bitcoin appear to greatly exaggerated.

Overnight Asian demand sent the cyrptocurrency to a new record high at $17,934 (Bitstamp).

Ethereum is off from its $750 highs, but rallying again today…

And while buying every dip and HODLing makes everyone seem like a genius, DataTrek Research’s Nicholas Colas has 5 Bitcoin Lessons For Every Investor

Whatever you think of bitcoin and crypto currencies, there is plenty to learn from their ascent, even if it is still a small part of the global financial system. Forget the noise of “Biggest bubble ever” – the market cap of the NASDAQ was $3.7 trillion in 1999 and fell 70% (a total of $2.6 trillion) by 2002. That puts the total of $500 billion in all crypto currencies outstanding into the correct context.

Still, even if you are in the “Bitcoin Bubble” camp, don’t let that blind you to the lessons of what has happened in the past few years. It is tempting – but wrong – to simply dismiss a 5-digit bitcoin price as the illogical mania of crowds.

Here is a list of 5 instructional points where bitcoin has a bigger story to tell.

#1 Decentralized technology – where no one is “in charge” – can both create and hold trust. Recall that bitcoin launched in January 2009, in the depths of the Financial Crisis. US stocks would not bottom until March of that year, and at the time no one knew how – or if – the global financial system would survive. That sounds like hyperbole now; it wasn’t then.

Combine that vacuum of faith with the growth of mobile technology and high speed Internet around the world, and bitcoin was at the right place at the right time. Early adopters were a mélange of libertarians and tech nerds, each of whom saw their own reflection in the bitcoin mirror.

Bitcoin’s rise from there is similar to any FANG-y stock story. Global adoption of new technologies led to Facebook’s dominance in social, Google’s in search, and Apple’s in hardware/software. What is different with bitcoin is that it has no CEO, no board, and no proprietary physical assets. But that has proven to be a feature, not a bug. No one “needs” to be in charge… And that’s new and notable.

#2 Get out of your head. One thing I have noticed about Bitcoin’s most vocal naysayers: they are almost all wealthy westerners. They cannot imagine why the world needs a crypto currency backed by nothing but computer code and the faith of the masses. For them, steeped in the status quo, it simply makes no sense.

Personal story here: my parents fled the Cuban Revolution in 1960 with $200 and a suitcase. They weren’t allowed to take anything else, or transfer funds overseas. They arrived in New York with no place to live and no work. My mom didn’t speak English.

Step outside the safe confines of western democracies, and my parents’ history is a relevant and cautionary tale. Similar stories happen every day, across multiple continents. Of course there is intrinsic value in a decentralized store of value that governments cannot control or confiscate. To think otherwise is myopic.

The Rest…HERE

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