Bitcoin Makes a Run
Bitcoin is in the news again as it tries to make a new all-time high above $20,000 per coin (source: Coindesk). Owning Bitcoin is no place for the timid, as its price has historically had some incredibly wild swings…
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Bitcoin: Large Declines from All-Time Highs |
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Dates |
Bitcoin High |
Bitcoin Low |
|
Dec '17 - Dec '18 |
19,783 |
3,122 |
|
Nov '13 - Jan '15 |
1,166 |
170 |
|
June '11 - Nov '11 |
32 |
2 |
|
Nov '10 - Nov '10 |
0.50 |
0.14 |
|
Sept '10 - Oct '10 |
0.17 |
0.01 |
Source: Coindesk
The risk of total instant loss in something like Bitcoin is substantial. So why would it even exist? Because enough people think Bitcoin may eventually offer financial solutions. A couple of possible examples:
- As a store of value. Some people believe that gold is a useful store of value. Buy some gold bars, store ‘em away. Carry them with you when you move. Bitcoin enthusiasts would ask “but do you know how heavy a bar of gold is? And how sure are you that you can protect your gold from being stolen?”
- As a method of payment. Right now, it is difficult to envision buying a cup of coffee or a television with Bitcoin. The price soars and dives faster than the Blue Angels. But Bitcoin advocates suggest that if (when?) the price becomes more stable, Bitcoin may offer an almost frictionless low-cost method for making transactions, even across international borders.
The first Bitcoin was created in 2009. Similar to any new frontier asset, you can find a huge range of strong opinions on the future of Bitcoin. But one thing is for certain, it is hard to ignore.
The views expressed herein are those of the author and do not necessarily reflect the views of Raymond James & Associates or its affiliates. All opinions are subject to change without notice. Neither the information provided nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Past performance is no guarantee of future results.
The investments listed may not be suitable for all investors. Raymond James & Associates recommends that investors independently evaluate particular investments, and encourages investors to seek the advice of a financial advisor. The appropriateness of a particular investment will depend upon an investor's individual circumstances and objectives.
The information contained in this email does not purport to be a complete description of the securities, markets, or developments referred to in this material.
Prior to making an investment decision, please consult with your financial advisor about your individual situation. The prominent underlying risk of using bitcoin as a medium of exchange is that it is not authorized or regulated by any central bank. Bitcoin issuers are not registered with the SEC, and the bitcoin marketplace is currently unregulated. Bitcoin and other cryptocurrencies are a very speculative investment and involves a high degree of risk. Investors must have the financial ability, sophistication/experience and willingness to bear the risks of an investment, and a potential total loss of their investment. Securities that have been classified as Bitcoin-related cannot be purchased or deposited in Raymond James client accounts.
