Trace Mayer emails:
Not sure if you saw this but it is someone, the account was a
temporary throwaway one, who last year traded 60oz gold for about
13,500 bitcoins with a USD numeraire amount of about $95,000.
Switching to a USD numeraire the 60oz of gold today would be about
$75,000 while his bitcoins are now around $13.5m. I suppose he may
want to take a mere 0.5% off the Bitcoin table and reacquire his 60oz
of gold.
http://www.reddit.com/r/investing/comments/w9qi2/i_am_trading_60_oz_of_gold_for_bitcoin_ama/
I thought it was funny that about 3 weeks later I wrote about the
coming Bitcoin breakout.
http://www.runtogold.com/2011/12/solid-bitcoin-consolidation-finally-bears-a-bitcoin-breakout/
And while doing some research crunching some numbers I figure
that if 1% of Chinese put $20 of savings into Bitcoin
then it would take prices to about $10,000 per bitcoin. Given their
lack of solid saving vehicles it is plausible Bitcoin, and other
crypto-currencies, may get some traction in this area given they are
currently relatively empty storage vessels and the funds flow from
filling them up will just generate more discussion. Just something fun
to talk about around the Thanksgiving table.
RW Note: I consider Bitcoin and other crypto currencies extremely dangerous. There is plenty of money flowing into them right now, so the upmoves will continue, however, at some point the flows stop and the currencies will collapse. You are at the roulette table when playing with them.
Since nearly everyone makes fun of the idea of Bitcoin, that must mean that it's an actual and true human advancement. History shows us that many major human technological advancements have been viewed much like a plague upon our race to be fought against and feared. In this case to be laughed at and spited. Bitcoin only needs to be backed, which is a small hurdle in light of all the naysayers trying to denounce and deride the idea.
ReplyDeleteBitcoin does not need to be backed by anything. In fact, that would create a fatal flaw. All it would take is a bigger army to raid the vaults and destroy the currency. Bitcoin is the commodity itself. It doesn't need backing just like gold doesn't need backing. They are both valued for what they are and what they enable you to do.
Delete"You are at the roulette table when playing with them."
ReplyDeleteWell said Sir.
As the saying goes: If you're sitting at the table wondering who the patsy is, it's you.
Be prepared to lose everything...
[Run Forrest, RUN!]
"There is plenty of money flowing into them right now, so the upmoves will continue, however, at some point the flows stop and the currencies will collapse."
ReplyDeleteYes, and Bitcoin has crashed before and will crash again, probably spectacularly--but you never explain what will happen *after* the crash. Did the internet cease to exist after tech stocks collapsed in 2000? Or did it continue to transform society?