A sidebar story to the current financial news is the collapse of the cryptocurrency markets. Some currencies have been wiped out altogether. Bitcoin, the flagship crypto, is at its lowest point for two years.
This has been the occasion of much schadenfreude. A lot of people have jeered at crypto from its first appearance. Our family accountant is one of them. "No store of value," he scoffed when I raised the issue with him. "Tulip mania!"
The reason I'd raised the issue with my accountant was, I hold some Bitcoin. I acquired it wa-a-ay back, when Bitcoin was trading at a few hundred dollars per. The advice I got at that time was to just hold on to it for twenty years or so, keeping it safe in a hardware wallet. I've followed that advice, and there it still sits. There it will still sit ten years from now, unless I'm driven to desperate financial straits.
Or unless Bitcoin itself disappears, which this week is looking possible.
Not that it hasn't always looked possible. Two or three years ago I encountered an old friend from my Wall Street days, one of the smartest finance and economics guys I know. What did he think of Bitcoin? I asked him. He, quote: "By year 2030 one Bitcoin will be trading at either over a million dollars or zero … and nobody knows which." End quote.
My holding is small and cost me next to nothing, so my financial peace of mind won't be much disturbed either way. As someone who distrusts government, though, and who especially distrusts government management of the economy, I am pro-crypto in a vague and general way; plus of course I wouldn't mind having a few million in the bank. So I wish the crypto markets well.
And well might happen. In the years I've held my Bitcoins there have been some wild swings. Perhaps this is just another one. The crypto boosters were actually telling us a year ago to be ready for a "crypto winter."
Another crypto winter. Just three years ago Bitcoin, the little blighter, plunged from over thirteen thousand dollars to less than four thousand in a few months. Crypto investing is not for the faint of heart.
And please don't take this as an endorsement of crypto as a solid long-term investment that just suffers short-term volatility. As you can tell, I don't take crypto too seriously. I was around Wall Street long enough to know that all investing is a form of gambling; and the rule for gambling, unless you're a reckless thrill-seeker, is, don't gamble more than you can afford to lose.
All that said, I'm still going to cheer on crypto as a harmless way to poke a finger in the government's eye, and possibly be in at the ground floor of an economic revolution.