Tuesday, June 11, 2019

Bitcoin's latest rise to $9000 shows that value investing is dead and that Americans are simply sheep running to the newest momentum trade

It was only about 18 months ago when cryptocurrency mania had driven up the price of Bitcoin to over $20,000 before market and sovereign interventions subsequently killed the asset class by more than 70%.  However as Chinese elites recently began using the crypto as a means to get their money out of the Yuan currency over the past two months, suddenly Bitcoin has become popular again as seen by the latest numbers in Google Trends.


It's hard to believe that Bitcoin has recently become more popular on Google than President Trump, Tesla, and Kim Kardashian, reported ConsenSys, a blockchain software technology company. - Zerohedge
Sadly, those who bought into the new hype have already lost nearly 13% as the price has fallen down below $8000, and on some days as low as $7400.  And even worse still is the fact that only once since December of 2017 has the price of Bitcoin reached half ($10,000) of its all time high from 18 months ago.

At the bottom of this re-emergence of interest in Bitcoin is the fact that Americans today are momentum traders rather than buyers of value.  And no greater example of this can be seen in how silver, which is a vastly important metal in the production of everything from Smartphones to Solar Panels, is at a historic low in the gold to silver ratio, and is the only, and I repeat only asset who's current price is below it's 1980 price.

There is a reason why the rich stay rich and why the average person does very well if they are able simply to just break even.  And that is because very few have the emotional fortitude or the diligence of learning to invest in what the wealthy do when the wealthy do, and instead relegate themselves to chasing momentum long after the smart money bought when there was formerly blood in the streets.

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