Well, it was a rather inauspicious start to 2018 for Bitcoin.
Admittedly, one-day moves in the cryptospace are the very definition of meaningless, but for whatever it’s worth, Bitcoin was down nearly 5% at one point. That marks the first time everyone’s favorite “currency” that meets exactly none of the criteria to be called a currency had fallen on the first day of a new year since 2015. By comparison, Bitcoin rallied by more than 4% on the first day of 2017.
I’m not sure how we missed this last week, but one of our favorite market commentators recently weighed in on the crypto mania and his take was characteristically dour.
David Stockman needs no introduction, but because many of the folks who are driving the speculative mania in cryptocurrencies have no market experience whatsoever, it’s probably safe to say that some Bitcoin traders aren’t familiar with David. To those folks, just know that Stockman was Ronald Reagan’s Director of the Office of Management and Budget, is a Wall Street veteran, and is a man who, if you ask him, will disabuse you of any pretensions to bullishness you might be harboring.
David is also an accomplished author and terminates bullshit with extreme prejudice on a near daily basis over at Contra Corner. As alluded to above, he spoke with CNBC recently about cryptocurrencies and while you can watch the video for yourself, this is the gist of it:
It will burn out in a spectacular crash. All of these latter-day speculators will have their hands burned to a crisp, and they will learn the proper lesson.
Got that? If not, you can watch/listen to the full interview below and do note how Stockman reiterates something we’ve been saying all along about the launch of Bitcoin futures and about Goldman’s apparently imminent plunge into cryptocurrency market making: namely that those developments do not constitute “validation” of Bitcoin. Rather, they simply represent the mad dash for those who haven’t participated in this to grab their “rightful” piece of the proverbial pie before it’s too late…