by Chris Becker
The new gold? The future of currencies? The proto-not printable money? However you describe Bitcoin, it seems there’s only one way to describe its trajectory: up!
Last night saw Bitcoin move over 6% in a single session to settle above a new record high above $4600USD:
Chart via ZH:
With volumes going alongside US stock futures in what looks like straight algo trades:
Its usually this time in a bubble phase that you see a rush of new buyers. I had that “BBQ” style conversation with a few friends over the weekend, some of whom had bought Bitcoin when it was only two digits and sold out in the three digits and some who had never bought at all. They all wanted in, so they cornered the FX trader in the room…
Bitcoin is a massive experiment that has the potential, both technologically and monetarily to disrupt some big players. It won’t push aside the gold hoarders, but this recent price action smells decidedly like that of gold before it tried to break free for the $2000USD per ounce mark in a period of heightened volatility and uncertainty:
Caution must prevail here, even the head of Bitcoin says to hold your horses and also don’t think that you have similar anonymous protection like you also overplay the assuredness of physical gold. From the BBC:
The head of the Bitcoin Foundation, Llew Claasen, has urged people to invest “no more than they can afford” in the crypto-currency.He was speaking at the TEDGlobal conference in Tanzania about the potential for Bitcoin in Africa.
Billions lack access to formal banking, but the uptake of mobile money means many are willing to embrace alternatives. Bitcoin had been adopted in Nigeria, South Africa and Kenya, he said.
The digital currency had particular resonance in countries with volatile economies, he said.
“It offers people a chance to protect their savings from government abuse of monetary policy.
“A lot of people in Zimbabwe are interested in it as an alternative financial system, but that is not an easy thing to do formally as we don’t want to be perceived as wanting to disrupt economies,” he told the BBC.
That would make it easier for investors to both put money in and take it out of businesses, he added.
Mr Claasen admitted that, in its current form, Bitcoin was not great as an alternative to cash.
But Mr Claasen sounded a note of caution, urging people not to invest “more than they can afford”.
“To be honest Bitcoin is not a great form of cash right now. Don’t think of it as cash, think of it as a digital form of gold that enables you to save outside of the current financial climate,” he said.
He blamed the currency’s recent volatility of the currency on “unsophisticated investors”.
“They read an article about it which may or may not be true and make decisions about its long-term future, and that is why we have extreme swings,” he said.