The crash of cryptos - Bitcoin’s bust and beyond
Bottom Line: It’s no surprise to me that Bitcoin is in the midst of a major collapse along with other cryptos. As I’ve pointed out previously, despite the notion that cryptos are something new – they're not. Just the methodology and the names. Cryptos have been around as long as the consumer internet. Four years ago, about the time cryptos became part of the American consciousness, I pointed out that there were more than 40 cryptos attempted in the 90’s. All of them became worthless. In 2018, of the top 20 crypto currencies based on market cap (size), they’re all substantially lower in value. In fact, the best performance is a decline of greater than 60% with the worst of the top 20 exceeding 90% losses. Those are crippling losses for anyone counting on that money. Here’s an excerpt from a story of mine four years ago at this time.
I don’t believe in investing in non-producing assets. If you buy a non-producing asset like gold, silver or even bitcoin as an investment you actually are gambling and guessing. You’re making the guestimation that someone will pay you more for that medium of exchange than what you paid for it. It doesn’t provide any inherent benefit along the way.
And there it is. And gold and silver are far more viable as they have historic factors as a medium of exchange along with over 30% of the metals harvested being used for commercial purposes. Cryptos are really nothing more than your typical Ponzi scheme. There isn’t anything of inherent value behind them and the only way you come out on top is if someone comes behind you with more money to put into it. Because these have been willed into existence anything is possible over the short run but here’s something to consider. This is an investment class with a 100% long-term failure rate. How much sense does it make to fight that trend?