I know, I’ve written similar before, but it’s gotten more popular now, and become even more absurd.
Bitcoin came on the scene in 2009, and two pizzas were traded for 10,000 bitcoins, which made each coin worth .0009 of a U.S. penny. In 2010, they were a full penny. In 2011, the price ranged from $5 to $30. In December 2011, they were $13.
In January of 2013, they were still $13. In November, $1,000. A month later, $300. In 2016, $1,000. In January of 2017, $2,000, and in August, $4,000. In 2018, it collapsed to under $4,000, and ended the year at $7,000.
In March of 2020, under $4000. May 2020, $10,000. November, $15.000. December, $20,000. January 2021, $50,000. May, $33,000. November 2021, $67,566.88, December 2021, $49,249, and two weeks later, $16,000. A two-week loss of $51,566.83 on each coin. Huge fortunes were lost.
As I write this on Saturday, January 13, 2024, bitcoin closed yesterday, at about $42,000, after going up to $48,000 a couple of days earlier.
Comparative to the tulip craze in Holland, when in the course of three years (1634-1637), tulip bulbs, did exactly the same as bitcoin today, in even a similar time frame, and equally, with something which has no real value. Tulip bulbs are worth a few cents anywhere, and produce beautiful flowers, which come up each year, and self-multiply continuously. More bulbs each year, more tulips, and no extra cost.
What are bitcoins backed by? Nothing. Do they self-multiply and give endless beautiful flowers each year? No. Can you by a physical bitcoin? No, since they are in what is called a “block chain,” and are “mined,” meaning that your coin is one-of-twenty-one-million, and you have one-twenty-one-millionth of a coin. “They” have “mined,” about 1.5 million, meaning there are still 20.5 million still to be “mined.” Have all 21 million been produced, or are they produced as they are “mined?” I have no idea, but the “mining,” requires millions of computers, which consume trillions of kilowatts of electricity. A few miles from me, there are 200 acres of solar collectors, which were supposedly built to feed the bitcoin “mining,” locally, I have been told. Tulip bulbs or gold coins, require no mining or electricity and computers.
As of yesterday, a bitcoin could be traded for 21 gold Maple Leafs! Do I need write of the beauty, non-corrosive, universal value, appreciation, and love of gold? Gold is ‘fungible,’ (freely traded), anywhere on earth, and will never do a tulip bulb-bitcoin affair, when millions lost everything they had, in both. Gold, is truly a one-time purchase of an inflation hedge, which continues to protect, no matter what happens to a currency. If a currency goes down, gold goes up in that currency, whereas an insurance policy, denominated in a currency, (dollars with us), as the currency goes down, so does the value of the policy, till both reach an eventual zero, which has happened in 100% of the time in world history. No monthly payments on gold insurance, no health examinations, age limits, or other requirements to “Qualify!” Leave it to your kids with no inheritance taxes, or spend it before you dir. Lots of luck!
Just imagine, what would happen to the price of gold, if bitcoin holders, gradually got wise and got out, realizing what a sham it really is!
Are there possibly trillions of shares of stocks out there in the financial markets? Probably. If you buy shares, do you actually get the physical shares? No, you get a spot in a computer. If you own a share of GM, do you have any power to change its value, or control what GM does? Could you have told GM not to get involved in electric cars, which have cost it hundreds of millions? No. Is a shareholder of anything, powerless to do anything but buy or sell? Do you control your inflation hedge, without voting for anything? Yes. If you own a gold coin, can it go eventually, anywhere but “up,” as a currency goes down? No. In history, has a paper, un-backed paper money, ever gone anywhere but down? Conversely then, guess what the future of gold is? Enough said?
Don Stott – don@coloradogold.com