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Foto do escritorCarl Boniface

Bitcoin Speculation

What endowed market traders don’t tell you is that Bitcoin investors are pulled in by hype due to already invested customers who profit from cryptocurrencies volatile market. It is in everyone’s interest to lure prospective investors because more sales helps to pump up Bitcoin’s value.  

We have seen the Stock Market grow and fall over the last century. More people buy shares and prices increase due to money being pumped in. Investors see many buyers and plenty of cash being invested, others follow, and it creates a bull market whereby prices rise. To the contrary, if people start selling their positions in mass, the market will fall and a bear trend starts to form. If enough sell then the market could crash. This isn’t rocket science, but rather market tendency.


In mid-2023 Bitcoin dropped to around $16,500 a coin, but because market traders hyped up the price many wannabee investors saw the market potential, as Bitcoin had already reached around $65,000 in November 2021. In fact, on one day, it spiked to over $67,000, but by the day’s end of trade it settled. Moreover, that more recent 16.5 picked up momentum, and over the next year rocketed, especially after cryptocurrency ETF approval in January 2024. A month or so ago it had reached around 70K.


This led to more hype which started to get out of control. I recall speculator experts saying by 2030 it will be worth in excess of one million dollars per Bitcoin token. They arrived at such a conclusion using the last years hike whereby Bitcoin had gone from 16.5 to over 70 when the market spiked one day, I think it even toppled 73K momentarily.


Now I believe cryptocurrency is a complete Muppet Con, as cryptocurrency is created via blockchain technology, and banks are heavily invested to make sure they are able to provide a robust and efficient digital currency which is real money and not tokens. Tokens work if you can use the purchase power when making acquisitions.


Here is the major problem: many receivers like Tesla’s electric cars pulled out because of the volatility of the market. Owner Elon Musk sold many tokens to cut his losses. Many other firms took payments for goods, but then even some of them bottled out, and are not likely to take the risk again. The market is up and down like a ping pong ball!


Early in 2021, Tesla invested $1.5 billion in Bitcoin. Shortly after, the automaker started accepting the cryptocurrency as payment on new vehicles. However, a year later, Tesla took a step back with crypto by removing the Bitcoin payment option because the value had fallen. They sold some of their Bitcoin. If you research this online, experts will say that Tesla lost half a billion by this move, as the market shot up again.


Nevertheless, it defines an unstable cryptocurrency market that is full of fly-by-night firms that produce their own tokens and promote them leading to Muppet investors getting ripped-off left, right, and center. El-Salvador has had the slowest growth in Latin America since opting for Bitcoin as their currency in 2021, while extreme poverty has doubled since 2019. I don’t know how you will read this tidbit of information, but it certainly turns on the red flag for me!


It is surreal as major investment and venture capitalist firms like A16z, a firm worth $42 billion, has invested in notable crypto investments including Coinbase, Aptos, Avalanche, Dapper Labs, Layer Zerofree, OpenSea and Worldcoin, among others. They have recently invested $100 million in Bitcoin, as well. Crypto investing will remain a priority, with new investing vehicles coming in 2025, Axios reported.


Investors argument is that ultimately investment in cryptocurrencies will become a win-win strategy. Certainly, some investors, perhaps traders who are better equipped to play the market have made a lot of money. However, for those less savvy there is a major risk. Only invest what you can afford to lose.


Take care!

Prof. Carl Boniface

 

Vocabulary builder:

Spiked (adj) = sharp, spiky, pointed. In other words, it shot up to a high point momentarily

ETF = Exchange Traded Funds i.e., When you invest in an ETF, you get a bundle of assets you can buy and sell during market hours—potentially lowering your risk and exposure, while helping to diversify your portfolio.

Bottled out (phrasal verb) = British slang: to become too afraid to do something: to lose one's nerve. “I was going to ask him but then I bottled out.

Fly-by-night (adj) = unscrupulous, dubious, unreliable, shifty, questionable, shady, untrustworthy, undependable, crooked, cowboy, (ant) reputable

Left, right, and center (idiom) = in a very quick and uncontrolled way. She has been spending money left, right, and centre: in all directions. The police were stopping cars left, right, and centre.

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