What Happened To Bitcoin?

In May 2020, Bitcoin was trading around $7,000 before it rocketed and hit an all-time high of $68,789 last November.

It’s now trading around $29,000.

That’s a drop of 60% in six months.

So what happened?

It’s simple. Bitcoin is just a big shiny dog that had the whole world barking mad up until last Christmas.

The thing is, it doesn’t produce anything, it has no cashflow and no intrinsic value.

The same applies to its flea-ridden crypto cousins like Ethereum, Dogecoin, Dotcoin, etc.

But try telling that to the crypto cuddlers and you’ll get this from them…

“You don’t understand…cash is trash…Bitcoin is a‘thing’…it’s the new gold…the ATO can’t track it…it’s a stock market hedge…and blah, blah, blah”

And then this one…“It’s an inflation hedge!”.

Really!

Gee, that worked well didn’t it. Just when inflation started to scream six months ago, what did Bitcoin do?

It folded like a deck chair.

And let’s not forget the breath-taking double standards surrounding this big woofer.

While scores of people were marching the streets waving their climate change flags, some of those same people were happily mining and trading Bitcoin.

Meaning, if Bitcoin was a country, it would be the 55th largest consumer of energy in the world because of the power required to mine its coins.

And remember, Bitcoin is just ONE of approximately 7,800 cryptos.

But bugger the environment. Greed first, green second. Hypocrites.

BTW…we’re not talking about dirty big, emission spitting, tax avoiding, corporates here. We’re talking about individual investors. Lots and lots of them.

You see, according to Morningstar Research, 86% of investors are now seeking more environmentally, socially and governance (ESG) focused investments.

And Bitcoin breaches everyone of those woke requirements.

It operates in an unregulated market, it has a massive carbon footprint and if you disagree with a crypto cuddler, then you’re a financial dinosaur.

Incredibly, one year ago, a survey revealed that 25% of Australians would like their wages paid in Bitcoin because of the potential upside.

So maybe we’re not as woke as we think we are, or perhaps we’re happy to junk our moral compass for more money…when it suits.

In any case, there is a massive lesson to come out of the on-going crypto collapse.

Manic markets never, ever last.

They always crash.

They’re bipolar in nature which ironically, makes them very predictable.

They start from a depressed low and then rocket into a manic high which is almost God-like and euphoric. Uncontrollable. The problem is it lures people into thinking it’s real.

And that’s exactly what happened to the crypto universe.

The higher the markets went the more the crypto cuddlers bought into their own BS and convinced others to do the same.

For example, last November, the Bitcoin believers were telling lookers and listeners…which was almost everyone…it was going to $145,000 within months!

Bigger flame, more moths.

Consequently, more new money entered the markets during 2021 than the previous twenty-one years combined. [1]

It was full blown mania. Unmanaged and unchecked. Capable of self-harm.

But now the everywhere bubble is coming to an end.

And it looks like Bitcoin and all its flea ridden friends are heading back to where it all started.

Under a rock.

Have a great weekend!

Adam

[1] Bank of America

Back paddock – politics is like sport; people don’t watch teams they watch people.