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Want to own Bitcoins or Gemini dollars?

Think of a number between 0 and 1 million dollars.

If whatever you have in your head is greater than zero, that could be the trading price of Bitcoin.

There is no good way to arrive at a rational value for the cryptocurrency.

It has no backing of any kind, whether precious metals or even fiat paper currencies.

There is no central bank behind it.

If someone breaks into your stash and takes your Bitcoins, there is no way to get them back.

Yet there are still people who think this is a good deal.

Bitcoin is trading around $6,500.

Check www.kitco.com for the latest price.

Obviously, having no physical existence has not stopped would-be buyers.

Last November, when I first wrote about Bitcoin, those would-be buyers had bid the price up to $8,000.

Then it was on its way to $20,000.

It reached the high figure around New Year’s.

I warned that I was skeptical of Bitcoin’s long-term value but also that my opinion would not stop a price increase.

It did not.

I also wrote that no one would remember my warning when the price fell back below $8,000.

That was equally true.

Conventional economists and financial types are growing more skeptical of Bitcoin.

They have been analyzing it to a fare-thee-well.

They do not like what they see.

But perhaps the most telling criticism is coming from heretofore supporters of Bitcoin: the Winkelvoss twins.

They are starting another cryptocurrency that has backing.

What’s that, you say? Something as conventional as backing?

Their new cryptocurrency is the Gemini dollar.

It is backed by U.S. dollars held by a respectable firm that will be audited monthly.

Sounds a bit like a checking account at a bank, doesn’t it?

Will this spell doom for Bitcoin?

Eventually, perhaps.

But as long as Bitcoin seems more interesting to financial writers than checking accounts, Bitcoin will probably continue to command crazy prices.

What will the value be next New Year’s?

I’m thinking of a number between 0 and 1 million dollars.

What are you thinking?

Buzz blogger Dave Harper won the Numismatic Literary Guild Award for Best Blog for the third time in 2017 . He is editor of the weekly newspaper “Numismatic News.”

 

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