So last week’s rise in the prices of altcoins hit a bit of a road bump over the weekend. Every time I check the bitcoin price, it’s swung by a casual $150 or so.
All the bubbly feels
My rule of thumb for bubbles: you know it’s happening when you hear about “this great investment” from your hairdresser*.
*No offence intended. It’s more about the fact that people in the services industry, who see clients during the day, tend to have some fairly in-depth conversations with people, multiple times a day. So I think that the people that work in those industries almost become real-live barometers for what is being spoken by the ‘in-the-know’ crowd.
Unfortunately, I haven’t been for a haircut in the last two weeks, so I’m a bit out of my comfort zone on this one. However. I did hear about it from a personal trainer. Also, while I was sitting in the airport yesterday, waiting to board my plane, I heard a group of rugby jocks talking about “blockchain prices”.
For me, this is symptomatic of why the bitcoin price is so volatile at the moment. I have been writing bits and pieces about bitcoin for years – and let me be clear, I misunderstand most of it. I have a vague concept of how the blockchain tech works (and I get the “you’re wrong but less wrong than most – except for this part, where you must just stop talking” response from people in the know). I don’t quite grasp why (or if) the distributed ledger is unassailable, and/or how vulnerable it is to external regulation. I tend to believe the data about China’s trading volumes, while many of the bitcoin experts don’t (and I’m still not sure why). I’ve read enough about the internal squabblings between coders to know that the bitcoin protocol is not nearly as clean or as practical as it needs to be.
But here are these guys casually misnaming their investments in public.
In my book, it’s the semantic difference between investing and speculating. Investors know enough to know what they don’t know, and they elect to take the risk anyway. Speculators get in there in the heat of the moment, and sort the rest out later.
But here’s a chart of altcoins
Now that I’ve ranted a bit, here’s this chart from VisualCapitalist.com
And also this:
I’m just going to leave these here.
Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha.