Two years ago in December we saw Bitcoin run up to $20,0000 a “coin.” We were told then that it would go up to $100,000 when everyone would be using it. If you saw the people posting on Facebook that I saw in 2017 then you saw the claims that it would replace the US dollar and abolish the central banks that I saw.
Of course it was a mania like Pets.com in 1999 or Beanie Babies and it peaked out and collapsed wiping out those that believed in it, but this summer we saw Bitcoin rally back up to over $10,000 a “coin.”
And so the believers came out again, but the summer rally proved to be a bull trap as Bitcoin is now hovering at $8,000 a “coin” by a thread.
What is a “coin” anyway?
A “coin” is nothing.
It is not money and will never function as money, because it is simply virtual paper created out of thin air backed by nothing that represents nothing.
In order to use a “coin” as money you also have to pay a big transaction fee using real currency like the US dollar. So to buy something for $10 in US dollars costs you over $30 in “coins”.
In order for something to really act as a money it has to function as a stable source of value and be easy to use in transactions like a currency. Bitcoin and other crypto “coins” are not able to do either of those things and that’s why they are not money and never will be money.
This is why you cannot leave your house and go to the Starbucks or McDonalds or to the dentist and get them to take Bitcoins as money. If you try it you’ll just get laughed at in your face and if you become a real nuisance you’ll get the police called on you. People are sick of hearing about these “coins.”
Crypto maniacs back in 2017 that I saw were claiming that crypto “coins” were a safe haven that were better than stocks. When I tried to tell some of them on Facebook that when you buy a stock you actually buy an ownership share in a company that can pay you dividends or allow you to gain as a shareholder if the company bought out, but you can’t with a “coin” as you own nothing when you buy a “coin” they would just talk nonsense.
What is a “coin” anyway?
A “coin” is virtual paper created out of thin air.
What it really is though and works good as is as an instrument of speculation.
You can’t use “coins” as real money, but if you buy one and it goes up in value in you win. If it goes down you lose. It’s pure speculation and nothing else. Kinda like putting money into a slot machine.
What was good for so many about these “coins” is that you don’t have to have any money to buy them. You can literally open up an online account to make a “wallet” and put in $20 using a credit card and start to buy these things whereas with most online brokers you have always had to have a few thousands dollars to pay the trading commissions to have a viable trading account.
So in 2017 the “coins” attracted young people with no money who could get involved with less than $50.00 and dream that a few “coins” could make them millions on day.
In that sense it was an incredible instrument of speculation as it enabled a generation of young folks with no money to get involved in the financial markets for the first time in their lives.
That’s why the connection between “coin” trading and phone app addiction is so strong.
But over the past few weeks online stock brokers have made a move that is going to destroy Bitcoin.
What happened is that Ameritrade, Etrade, Schwab, and others have announced zero trading commissions.
So the youngsters just starting out can now buy stocks for free.
They no longer have to pay commissions.
What made the “coins” so fun for such people was that they needed no money to open an account.
Well now the same can be said to them for trading stocks.
So now more than ever the right stocks are not only good for investments, but superior instruments for speculation than the “coins” are.
No one has made this connection yet.
But now you know that by moving to free commissions the online brokers have spelled the slow death of the “coins.”
In time the “coin” players will realize this and move into stocks and gold and silver.
And then the only people left using them will be those shady characters who used them for money laundering, strange transactions, and other bad things.
Bitcoin is hanging on a thread at $8,000 a coin.
Bitcoin is not money and as an object of speculation the online brokers are rendering it obsolete!
If you got any now is the time to get out and walk away from it forever so you can move that money into hard real currency cash or even better yet into gold and silver.
And if you have a kid or grandchild that got into these “coins” in 2017 as their first entry in their lives into the financial markets and trading then now is the time to talk to them and and use it as a teaching moment. Encourage them to turn their “coins” into real money and move what they have left into a real brokerage account. They can do free trading with the Robinhood app if they need a phone app to feel comfortable.
And if you want to step up your own trading now is the time to get into my private Power Investor group. Go here to start: