It’s only three weeks, but we simply must return to Bitcoin..!
I concluded my blog on 13th November with the following two sentences:-
Extrapolating the same size move again, we would have Bitcoin at $11,000 on Christmas Day. That would certainly make Mr Draper’s (Not Don, but Tim, one of the world’s top VC’s) Christmas that bit more special!! But I don’t see it scaling such peaks that quickly, but one never knows…
Well, well I never!
Remember that Mr Draper bought 30,000 coins from that US Marshals Service three years ago. He is now sitting on over $350 MILLION worth of Bitcoin, having bought when they cost around $18 MILLION!!! Not only has Bitcoin’s stellar surge accelerated even faster to hit a supposedly risibly tough $11,000 three weeks before ‘the chart’ indicated, but as I write this now, Bitcoin is just a shade below $12,000.
One can hardly fit the accelerated recent moves on a chart. The move this year is dizzying!
There are now thousands of Bitcoin ‘investors’ around the world who think that owning Bitcoin is the ultimate gravy train. Already, supposed experts are predicting $20,000 by 1st Jan and even $50,000 by the summer. Currently, Bitcoin mining uses up as much electricity as the entire of Morocco consumes. Now one-seventh of one percent of the world’s energy consumption is used by those mining the most celebrated crypto currency! Currently roughly 80% of the mining takes place in China, a country famed for its extensive use of coal-fired power stations.
I wonder how many of the hipsters, who are buying Bitcoin (or joining one of the many Bitcoin clubs that are cropping up across the western world) in the belief that this represents free and easy money, realise that they are in part contributing to global warming! It is for this reason that some responsible global citizens who are Bitcoin fans are choosing Iceland as their new destination to begin Bitcoin mining. As it is so parky in Iceland, the relative energy cost of mining there is lower. Mining requires enormous power and all those servers create immense heat, and a naturally low temperature is most helpful. Iceland has less need for expensive auxiliary cooling costs, so is one of the most potentially profitable places to mine Bitcoin. It’s not just some very well-resourced international Bitcoin & Ethereum miners (such as BitFury, Cloud Hashing and Revelation Mining) that are setting up shop in Iceland to take advantage of Iceland’s green energy and biting fresh Artic air, the world’s most potent tech behemoths (Google & Facebook) are also doing likewise with vast server fields cropping up on the rocky outcrop. As an aside, Iceland does seem to be on the road to recovery after the disastrous ramifications of the financial crisis a decade ago. Wise use of their natural resources to take advantage of the world’s insatiable appetite for computing power for one seems to be leading the way. (And their football team ain’t too bad either! I wonder how they will do in Russia. Will they come back to haunt England again like they did in the Euros last year!?)
A glance at the below shows just how incredibly volatile Bitcoin was last week:-
Having popped through the magic $10,000 mark on Wednesday morning, the price proceeded to rise another 12% in a matter of hours, whereupon it promptly collapsed 14% in just 5 hours.
Was this sudden drop sufficient to prick the Bitcoin bubble as many famous commentators label it? Of course not, rather we have seen Bitcoin surge by another 22%!
It’s not just Mr Draper who will be having a good Christmas, but also the infamous Winklevoss twins; those of Facebook that never was fame. Part of their payout from Mr Zuckerburg over their claim to have invented Facebook, was invested five years ago in Bitcoin. Their $11 Million bet is now worth a cool $1.1 Billion. I guess that might go some way to easing their immense irritation at seeing Facebook now be worth in excess of $500 BILLION!!
Is now the time to call the top on this bubbly asset / commodity / currency?
It takes a brave person to go short at the moment and remain so for longer than 24 hours!
There seems to be so much FOMO (Fear of Missing out) around Bitcoin and also Ethereum (up 60% in a month — see below) that it wouldn’t surprise me if this rocket has further to go! CME, the world’s most famous exchange is about to launch Bitcoin futures. Bitcoin’s penetration into our lives continues unabated…
And the debates about Bitcoin similarly continue unabated within private and public groups in the Pelican community.
Whatever your view on Bitcoin or Ethereum, only within the Pelican network can you build your own discussion groups or seek out other groups where you can chat, see others’ positions, copy or even oppose trades, all within a unique FCA-regulated environment.
So, start your own debates today about any of our thousands of markets, whether amongst your friends, like-minded investors you discover within the Pelican network or with professional traders!
