Sunday, November 24, 2013

EXPERT: Bitocoin Headed to $3,500

I just spent two hours today with Bitcoin expert Trace Mayer and Vitalik Buterin, head writer at, who have been in San Francisco for a couple of days.

It's always a pleasure to talk to Trace, who I consider one of the foremost Bitcoin experts. He bought a ton of bitcoins at 25 cents (and lower). I asked him if he was a billionaire yet, and he just smiled.

During our meeting he outlined the fascinating supply and demand dynamics of  Bitcoin. There are currently 12 million bitcoins outstanding but Trace makes the case that the actual number of bitcoins in the float is much smaller.

For example, he believes that most of the bitcoins that the FBI grabbed at the time of Ross Ulbricht's arrest were not bitcoins that belonged to Ulbricht, but were coins that belonged to active buyers and sellers on Silk Road. Thus, these active coins are now in the hands of the FBI and are out of the float.

But more intriguing, Trace tells me he believes that between 3 million to 6 million of bitcoins will never trade again,  because they were purchased early on and those who purchased them have forgotten the passwords to gain access to them. Thus, the true Bitcoin float maybe only between 6 million and 9 million bitcoins.

Given the amount of hedge fund money that is now entering the Bitcoin arena (He told me that at a meeting he attended in NYC that a Goldman Sachs analyst was even in attendance studying how GS can get into the Bitcoin game.), Trace believes that Bitcoin is headed to $3,500. A trader friend of mine thinks it will head to $10,000, before it crashes to zero.

I continue to believe that Bitcoin has many of the aspects of a pump and dump scheme and agree with Peter Schiff that it is Tulipmania 2.0, but I don't think the last tulip has been sold.

It is a very risky trade, but there is probably more upside here.

In the EPJ Daily Alert, I will have more details about Bitcoin and what Trace told me about when he plans to start selling and why. It's great timing advice for Bitcoin traders.

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  1. Why didn't bitcoin crash to zero when it went from $30 to $2? Or from $266 to $50? Why does it keep recovering and overtaking its previous high?

    And if you're going to make a prediction that it'll go to zero at least have the balls to say when. Otherwise your "prediction" means nothing. You can keep claiming it'll happen... eventually! Man up Wenzel, your article on bitcoin sound like they're written by a whiny little girl

    1. a real economist doesnt know when. he just knows. your claim can be said for any other bubbles that have existed in recent history. who cares if it goes to zeroor just 2 dollars. Its not a sound investment OR money. Maybe one day perhaps, but the burden of proof is on the bitcoin advocates. until then, you sound like a whiny bitch{coin}

    2. then...go somewhere else for your btc advice, to someone more 'manly' like Max Keiser for example, who will give you tons of advice 24/7...only problem is, that his advice is mostly 'talking his book', trying to pump btc up 'cuz he's long out the wazoo. He does present convincing arguments about a positive future for btc, but i've yet to hear him mention any potential negatives...Bob Wenzel presents a thorough, objective view of btc's positives AND negatives, and he's not dumb enough to think he can 'time' the short or long-term price fluctuations.

    3. What a stupid comment. Back in the 60s I could have told you the USSR would eventually collapse, but just because I couldn't give an exact year would that have made my prediction less valid? Would it of meant I had no balls? You see evidence, examine the logic, look at history and then make a prediction.

      Bitcoin fanboys in too 2013are worse than the silver fanboys in 2011. At least the "silver stackers" still have something to show for their efforts. i fear Bitcoin bag holders will be far worse off.

  2. I do not think anyone can predict the future price of BTC. Ideas, however, has major real world consequences. BTC is an ingenious advance in ideas.

    After all, a uniform medium of exchange, double entry book keeping, the joint stock corporation, were all human inventions - and each transformed physical reality and all our lives.

    As a lawyer I often had to argue the weak side of an argument. I always found it possible to create a plausible argument for my side. Rationality will not decide. That is why philosophy has been such a failure to discover the ultimate nature of knowledge (epistemology) reality (metaphysics) justice (ethics) beauty (aesthetics). As the Austrians would say - there is no calculus to weigh the various factors and vectors. BTC has these disadvantages and these advantages. Where is the formula showing which is more important, or which will decide. How much weight to apply to "intrinsic value"; how much to apply to "anonymity"; how much to "lower transaction costs"; how much to "can't be printed" vs. the disadvantages of other things that can;t be printed.

    No one can weigh those factors any more than they can direct an economy. People using BTC, or not, will determine its place.

    No rationalization of abstract unmeasurable factors wil play a roll.

  3. The smartest people in the world could sit around and rationalize about if a new coffee shop that charged less than Starbucks but offered less experience would succeed. they could rationalize about this factor and that factor. weigh in their minds the importance of each. The only real world test would be to open the coffee shops and see if they met people's wants ans needs. The same for bitcoin.

    We will all find out if it meets people's wants and needs, if it replaces or supplements the $, or if it disappears. There is no reasoning it out

    1. So if Arby's offered a "turd sandwich," made from 100% llama turds, you wouldn't be able to use reason to derive whether it would be successful? How do you choose which companies to invest in, if not for using reason?

  4. "Nothin' from nothin's still nothin, ya gotta have somthin', yes indeed. Do you remember I told ya, I'm a soldier on the war on poverty..."

    (In the land of the blind, the one eyed man is king... How do you reach the insane?)

    [Sound of silence.]

  5. Bitcoin is a Rothschild-backed intelligence-funded pump-and-dump. The purpose is to destabilize the dollar and provoke demand for a global single currency.

    It is the global elite-backed "controlled opposition," using spokesmen from the CIA-infiltrated/ hard-money or "libertarian" community. The ones pitching it will make money as the proles rush in.

    It is easily tracked, easily gamed.
    More so than the dollar or gold.

    This massive swell of interest and pumping by all and sundry is a sure sign of intel involvement.
    Shame on anyone who is so credulous to believe this is the "free market" at work.
    Shame on anyone who supports this kind of elaborate con played by the very cartels that anarchists are supposedly fighting.
    People promoting this might as well have INTEL stamped on their forehead.
    Or FRAUD.

    1. your theory is absolutely plausible. i'll give your theory more weight when i see btc being 'pumped' by the media whores (cnbc, etc) to the sheep...that's when i'll start seriously considering selling .

    2. It took the CIA three years after the start of Bitcoin to take notice. What were they doing that whole time, just waiting for their scheme to develop and the pretending to be completely ignorant of it?

    3. "Bitcoin is a Rothschild-backed intelligence-funded pump-and-dump. The purpose is to destabilize the dollar and provoke demand for a global single currency. "

      Can you demonstrate this to be the case, with evidence, or are you simply claiming this to be true?

  6. @Philip, Anonymous, edward.

    Intelligence and government are multi-layered, not unitary.

    The right hand doesn't know what the left hand is doing. Sometimes even the left hand doesn't know. Just a finger or a nail knows.

    Intelligence might take a while to understand the potential in something their scientists come up with. So it might take a year or two or more. Then they embrace it.

    The MSM media is brain-washed one way - the obvious mainstream, Keynesian brainwashing.

    The alternative media, including hard money people, are past the mainstream brainwashing, but they fall for the second-level brainwashing - they fall for Snowden, Assange, Hacktivism, Crypto-currency, Wikileaks, and all such black operations, meant to appeal to gullible, egoistic anti-govt types.

    There are legions of agencies involved who profile dissent and come up with the red herrings that will be swallowed by the maximum number of fools and opportunists.

    The economic dissenters trust their hard-money gurus, but that crowd is filled with two-bit cons who will fit their agenda to whatever the intelligence agencies tell them.

    Please go back and look at when Bitcoin mania started and look at who has promoted it.

    Be wise as serpents, my friends. Wenzel's instincts are right. I hope he will not be dazzled by Mayer's "expertise" and misled into supporting this con game.

    As for sources. Do some research directly yourself and see what you find.

    1. Brilliant analysis!

      Bernanke gives Bitcoin a thumbs up.

      Bitcoin ATMs go biometric with palm readers.

      Trilateralist Larry Summers begin the push for a digital currency and the elimination of cash at an IMF meeting two weeks ago.

      Bitcoin goes to China where the Technocracy and Agenda 21 models are at a more advanced stage than the US.

      A couple of days ago, a Bitcoin millionaire and proprietor of essentially admits after a long debate with a skeptic that Bitcoin might be like a page out of Orwell's 1984 but then goes on to say so what, eventually after being tortured the protagonists accepted their fate and were happy.

      So much for Bitcoin as a Libertarian-esque movement to protect our privacy and basic human right to be free from fiat enslavement.

    2., are you saying that the 'elites' are behind btc and are actively (behind the curtains) promoting it here in USSA and in China , as THE new worldwide digital currency, with one of their motives being the phasing-out of USD ? I'm just trying to clarify your statements...thanx , Phil

    3. @anonymous : can u explain how Snowden & Assange fall into the 'second-level brainwashing' category ? I totally understand and agree with your whole 'smoke & mirrors' theory, but I'm not sure what to think about S&A and would love for u to explain , thanx !

    4. @Anonymous I agree with your overall thoughts but you didn't really offer up your 'take' on what's really going on with BTC what's their 'endgame' .... .

    5. @Phil McKreviss, EndtheFed,

      There are a few libertarian (rightist and leftist) blogs where Assange and Snowden have been deconstructed thoroughly. No need to reinvent the wheel here. Let your fingers take a walk and you will see that they are both mouthpieces for the global elites.

      Some reliable sources you could read: Cottrell, Rappaport, Creighton, Rajiva, the top of my head.

      China - China is a COMMUNIST country, my friends. Goldman Sachs has a big presence there.

      End-game is control - maximum control over your assets, your money, your movements, your writing, your thoughts - so they can harvest it all for themselves.

      The elites would be gods...and for that, they need for you to be less than men. They need for you to be little BITS of a machine.

      Read everything critically, inwardly, not in this trusting fashion.

      Rest assured, when something shows up on the internet, with this much fanfare, the elites approve.

      Freedom is hard.

      It will not come without sacrificing some time, effort and along the way, some favorite delusions and consolations too.

      Biggest delusion is to believe that there is any quick simple remedy whereby you get to make a ton of money quicker and liberate "the world" too.

      All that is Grimms Fairy Tales in a special edition for libertarians.

    6. @Anonymous : thanx, i grasp your overall thought pattern here....i guess though i'm still trying to figure out how the Snowden/Assange 'revelations' ie: NSA spying, etc qualify as 'disinfo' as you are claiming...i'm not saying i disagree, just trying to solve that particular part of the 'puzzle'. Maybe, all their 'revelations' are just a way for whoever is pulling Snowden's/Assange's strings to intimidate the 'noisy' hard-money people into keeping their opinions to themselves ie: not using email/web/etc to spread their message ? Am I getting warm ? Thanx...

  7. Max Keiser is an expert that predicts it to hit $1 Million. The same guy who said silver would hit $500 and it would crash JP Morgan.

    1. If you follow Max, you will find that he is not an expert and knows little about the inner workings of the beast.

      He does however like the idea of a totally private, secure means of exchange. Unfortunately BitCoin is anything but "private" much less "secure"...

  8. Understand how the Tavistock Institute of Human Relations and its hundreds of offshoot institutions work. Social engineering / managed society is now the most profitable industry on the planet. The Bank for International Settlements is the world government, in the form of an unelected private corporation that is above all laws. The BIS controls all major and even most alternative media, and creates "grassroots" movements to distract the masses, who remain perpetually blinded by the paradigm as shown on TV.

    Believers of the false paradigm are everywhere and will eventually be programmed to turn on those who know the truth. The believers are brainwashed and deserve pity, but they are also slaves who will fight for their slavery due to their ingrained ignorance. Undoing their ignorance can take a lifetime of work.