From the Dec. 15 Numismatic News E-Newsletter:
Are buyers of Bitcoin going to get burned?
Here are some answers sent from our e-newsletter readers to Editor Dave Harper.
Yes I think that buyers of Bitcoin are going to get burned. I used to work for JP Morgan Chase Bank, and I had great respect for the CEO, Jamie Dimon. He has stated that Bitcoin is a fraud. It has been said that a person should not invest in anything that they could not explain to someone else. I just went to www.wikipedia.com and read all about Bitcoin, and I still don’t understand a word of it. I think what we have here is the greater fool theory, which states it is possible to make money by buying securities, whether overvalued or not, and later selling them at a profit because there will always be someone (a bigger or greater fool) who is willing to pay the higher price. That works until the bubble bursts and the poor sucker at the end of the chain gets left holding the bag. You can readily sell tangible assets. You can take your fiat coins and currency and credit cards to the grocery store and buy whatever you want. Try doing that and paying with Bitcoin. Lots of luck.
Will buyers get burned?
Is the Pope Catholic?
Colorado Springs, Colo.
If history can be a guide, I would hazard an educated guess and say yes! Bitcoin will probably crash and burn.
This is as typical as any unbacked “bubble” currency can be. It will reach the stage where the shrewd speculators will decide to get out with their profits – if they haven’t already.
Uncertainty will be sparked by some event, most probably in the U.S., and a few more timid souls and institutions will start to, quietly and quickly, off-load their holdings of electronic Bitcoin and sell for less than market value.
The whole house of cards will then start to collapse upon itself at a faster and faster rate – it has already gasped a few times recently and been revived – and the slowest of the “last naive men left standing” will inherit the final mess and nothing more. Remember the phone card debacle.
Bitcoin’s rise has been spectacular. Its fall will be just as phenomenal and resounding.
Does anybody want to buy some tulip bulbs?
Like every bubble it must hit a level where it will burst. History has proven this, but some people will not learn from the past.
After checking with experts (NN editor being one) I vote not to even consider the purchase of this venue. After all, should someone make a purchase, the least amount of loss is in numismatic items, or precious metals. Gold/silver may go up, as well as down. The amount of loss over time is minimal. Bitcoin investment reminds me of a scheme to fleece of one’s finances. Don’t invest until you check for yourselves! After all, I did. So should you.
In short, yes, definitely, in my humble opinion! I read with great interest the Numismatic News electronic version article by Patrick Heller, dated Dec. 14 on this topic entitled “Bitcoin clobbers metals.” I agree with everything that Pat stated in his article and would like to add the following saying from an old crusty departed father of a friend of mine: “Even if it’s true, I don’t believe it!” What he means to say is if it’s too good to be true, it’s not.
Crypto what? Bits and bytes flying in cyberspace, a series of zeros and ones that have value? People cashing in their silver and gold, tangible assets of wealth that have held value since biblical times, for thousands of years, and still are recognized as such today. People are “sheeple.” To compare as people that are ignorant with their iPhones. The youth today would rather have a newfangled iPhone that costs them $1,000 today, and is relatively worthless in a few years. Only to succumb to purchasing another and another one and another one. What is the value of an iPhone? The information and convenience that it can give to you, perhaps. Mostly, though, it is about entertainment and bragging rights of having the “new one” to impress your friends.
I don’t know much about Bitcoin. I don’t believe in it. Certainly, there may be some sort of cryptocurrency in the future, but I have no doubt that the governments around the world will start cracking down and enact banking laws and regulations, and then Bitcoin will tumble, if not sooner. This is no different than the snake oil salesmen touting the cure for every disease or Madoff touting 12 percent returns year after year, even though no one else on Wall Street could obtain that type of investment performance. Oh, because we are too dumb he would say. Yes, I am too dumb to understand how Madoff could produce 12 percent ROI when the rest of investment gurus could not. It’s because he was a fake, a liar, a swindler!
I’m noting necessarily that Bitcoin is another Madoff Ponzi scheme, but I definitely think that this is a bubble waiting to explode like the S&L crisis, unregulated penny stocks, the list goes on and on. I would recommend your readers watch the movie and read the book entitled “The Wolf of Wall Street,” which is based on a true story and is based on facts about real people. It will open your eyes to the old saying that “A sucker is born every minute.”
Like I said, even if it’s true, I don’t believe it.
This article was originally printed in Numismatic News Express. >> Subscribe today
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