The Macro Market Wrap Up With The Mad Genius, Vol. 31

2018 was a big year for cryptomania. Unfortunately for the permabulls, is was big in all the wrong ways. I pick on BitCoin because it is the most well known and most used of the cryptocurrencies, but in a nutshell, the story is the same for all of them.

BitCoin topped in December 2017 at a price in excess of $19,300 (coindesk.com). At the beginning of 2018 the high for the year was in on January 6 at $16,678. Cryptomania was hot, real hot. Most of the pump and dump pimps were calling for $50,000, $100,000, and even $1,000,000 as the right price for BitCoin for the year. As that was happening, I said “Don’t let the crypto currency story become kryptonite to your portfolio.” And that pretty much sums up my thoughts on crypto currency.

For those of you who want a little more detail, keep reading. 

I expressed several concerns over the crypto currencies, including hacking (that happened), it can easily multiply (that happened) as there were over 1200 currencies at the time and now there are over 2100, it’s was not widely accepted and still is not (that’s a confidence problem), and you can’t hold it in your hand like other currencies (which is problematic if there is a widespread power outage like 2003 which affected over 55 million people in the USA and Canada).

There are other problems with cryptos as well, and the biggest problem I see is government intervention of all types. After the financial crisis began, Rahm Emmanuel was famous for saying in a Wall Street Journal interview on November 18, 2008, “You never want a serious crisis to go to waste…this crisis provides the opportunity for us to do things you could not before.” 

For all the crypto bulls who say that it’s impossible for the government to intervene in crypto, I’ll be the last one laughing when the government finally intervenes and bans all other cryptos except its own FedCoin at the onset of the next crisis. I listed several reasons that government is problematic to cryptos, and while it hasn’t played out yet, I expect government intervention will take all crypto currencies to zero outside of illicit and criminal activity on the black market.

One final point on cryptos and that is like I said above, don’t let crypto become kryptonite to your portfolio. If you made some money in this, great. I’m happy for you and I hope that you should continue to prosper. If you can day trade it, fine. If not then get out and don’t look back. And we see that cryptos fell 83% last year from a total market cap of $796B at the peak to $135B today.

That’s it on BitCoin and Crypto Currencies. I think I was pretty spot on with this call. I have one more review left for my 2018 forecast and that is #energy, and then it’s on to my forecast for this year. Thanks for reading Volume 31 of the The Macro Market Wrap Up With The Mad Genius. If you have any questions, leave those in the comments. And remember that there is always a bull market somewhere in the world, and on the opposite side of crisis there lies opportunity.

#economics #bitcoin #cryptocurrency #investing #yearinreview2018