Through 15 years in Precious Metals, I witnessed the entire spectrum of investor emotions…as an all-in investor of first, mining stocks – and subsequently, physical metal; an employee of first, mining companies - and subsequently, a bullion dealer; and a well-known public commentator.
Mining stocks peaked in early 2007 - with a secondary, but less frothy, top in early 2011; and bullion, in 2011 – silver in May, and gold in September. Since then, global money printing, debt, inflation, and Central bank intervention has gone parabolic – and yet, prices of gold, silver, and miners are mired near the decade’s lows; and in inflation-adjusted terms, all-time lows. Yet, die-hard “stackers” still believe good times are just around the corner – and that miners will rise again, despite the industry having been all but destroyed by price suppression, depletion, cost inflation, share dilution, and debt…and oh yeah, all-time low bullion sales. True, most are “old-timers” that refuse to realize the burgeoning Digital Age is rendering Precious Metals useless. However, the fact that they still remain optimistic – as witnessed anecdotally, by chat room posts and the number of hits on pro-PM podcasts; is a tribute to delusion, dogma, and stubbornness.
Conversely, we have Bitcoin – which, after two of its best years ever, is amidst a frustrating period of consolidation…at prices 8x a year ago, and 20x two years ago. Yes, the correction has been painful; and the relentless, Charlie Brown-like fits and starts – where Lucy continuously pulls the ball away, just as it seems all clear. However, unlike Precious Metals, Bitcoin’s past decade; particularly, the past two years; could not have been more encouraging - financially, technologically, and adoption-wise.
Yet, after the latest “ball-pulling” by the Bitcoin market; first, from $9,700 to $8,700 – and then, $10,000 to $7,800; it appears that sentiment – which had been steadily declining already; has hit rock-bottom levels, as if the price is not $7,900, but $1,900. Which can easily be discerned by a variety of factors, empirical and anecdotal.
Crypto trade volumes are down dramatically – as is site traffic at websites like mine; and interest in consultations. The amount of Twitter posts and Google searches related to crypto have plunged – and for the first time, I’m actually seeing a modest decline in followers. Crypto podcast hits are down dramatically, and the amount of negative posts in chatrooms are skyrocketing. In many ways, it feels like the sector has died. And yet, despite all this; and the Mt Gox Trustee relentlessly suppressing the market; the price is still $7,900.
A contrarian would say such “mass mental capitulation”’; not to mention, market capitulation by the thousands of investors who got in at the top; and older investors – impatient for further gains, fearful of losing profits, or worn down by FUD; is a bullish sign. That said, there’s no way of knowing if the bottom is in; and if not, when and where it will occur.
As for me, it couldn’t be clearer that Bitcoin’s value is rising at current prices – so I’ll just HODL.
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