He's at it again. My good and respected friend simply cannot refrain from ripping apart the revolutionary revenue creator known as Bitcoin.
He warns: "I'm just aghast at ordinary people who think they're some kind of Gordon Gekko forex arbitrageurs. Don't you people realize, now that there's a futures market in Bitcoin, the price of this imaginary money will no longer be determined by people (ordinary or otherwise) but by high-speed trading supercomputers who see your personal orders milliseconds before you get to place them? They're frontrunning you, people. Get out. You can't win."
Good heavens! He's aghast!!
And then he posted the following article to scare us all into selling our beloved coins AFTER the recent pullback.
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Isn't it interesting that these naysayers always give the worst advice at the absolute worst time? I mean, it's one thing to sell your crypto at all time highs. Sure, that makes perfect sense...but why do these chicken-littles always advise selling low? I suspect it has more to do with sour grapes and the cold, hard reality that they didn't get in when they could have and in order to ease their demoralized conscience, they simply want the crypto world to crash and burn so they can pronounce from the roof tops, "I TOLD YOU SO!"
And so I had to set the record straight:
WHHHEEEWW!! What a ride!!!! This is why, when you buy, many recommend you “HODL.” (Hold On for Dear Life)
But on a more practical note:
Yes, there is a futures market for Bitcoin, but if you read the fine print, these contracts are not paid out in Bitcoin upon expiration. Speculators only get a cash settlement unlike every other commodity listed on the exchanges. (Talk about a farce.) Thus, these are merely side bets and have very little to do with the price of Bitcoin, other than a few zillionaires who buy Bitcoin on the open market (pushing the price up) who then short it in the futures market, and then quickly go and dump their Bitcoins to lower the price.
Sure, it’ll start a stampede to the exit door, but what else is new? Over the past year alone there have been 5 or 6 crashes of 30% or more that caused the exchanges to crash and people to panic. Business as usual in this unregulated (Wild West) market. Then again, when was the last time the stock market corrected? (Doesn’t matter…that crash will come soon enough or am I to believe the DOW will go up forever? Eh, who knows? Who cares?)
Bitcoin is a relic anyway...its primary function these days is simply as a means to enter the crypto market so you can exchange it for other cryptocurrencies. (Note - most exchanges do not accept fiat dollars.) Therefore, the demand for Bitcoin will continue to grow as all the exchanges use Bitcoin as their common currency.
I guess Bitcoin can still be considered a store of value. After all, it's up about 100% since early November but it’s probably important not to buy when it’s at all time highs. But this could be said about anything.
Be that as it may, there is infinitely more going on in this ecosystem than just Bitcoin and its price. I hear rumors that Amazon might be partnering with Litecoin and it’s now a well known fact that the banking system is moving toward Ripple, which only costs about $1.07 per coin at the moment. This coin, too (so the rumors go), will likely be offered on Coinbase in the near future, and unlike Bitcoin, Ripple actually has functionality! (Note: Bitcoin is now FAR too expensive and INFINITELY SLOW. I absolutely despise using it and offer up a few choice words at my computer every time I’m forced to make a transaction with it. That being said, it is hard to resist buying it when the price crashes every few months—add a little here, a little there….and it adds up.)
Don’t throw the baby out with the bath water just yet. There’s infinitely more going on with this market than just Bitcoin speculation. And if the cover of the Jan/1988 edition of The Economist magazine is correct, a new one-world currency WILL take root next year. (Don’t second-guess the Rothschilds when it comes to banking, finance, and the control of world currencies. Then again, perhaps I should exchange any crypto I have laying around for gold and silver. I am skeptical of these banking overlords and the wake of destruction that follows their every move.)
As for the Gordon Geckos of the world, they exist in every market that utilizes supercomputers and hi-frequency trading. Are you suggesting I should sell my stocks and dump my IRAs because the Wall Street kings have rigged the game? At least in the crypto world, it’s a level playing field. Aside from Bitcoin, there are no futures markets to contend with. And even if there were, it wouldn’t matter anyway because these contracts are settled in cash. What a farce! (Did I already say that?) This situation just adds to the volatility and provides numerous opportunities to buy when the pull-backs occur. Note: I used to think it was a gold medallion hanging around the Phoenix's neck below. Upon closer inspection, it looks a great deal more like a Crypto-coin symbol. How'd they know?!