bitcoin bubble

It's been a while since I wrote about bitcoin. A few weeks ago a reader commented on one of my posts from several years ago and mocked me, saying something like "if you weren't a fucking moron and bought Bitcoin when you wrote this shit, you could be rich by now."

And, equally, I could be bankrupt by now.

I don't care how high Bitcoin happens to be at the moment. The bottom could drop out tomorrow. Or in two minutes.

Unlike commodities such as gold or blue-chip stocks, Bitcoin has no intrinsic value. It's not backed by any assets. It does not pay dividends or interest. It is as real and as fictive as Monopoly money.

Yes, some people will make millions on Bitcoin. And some people will lose millions. Unlike stock and commodity markets, which are regulated and subject to limitations, Bitcoin is a car with no brakes.

In the words of Warren Buffett, a man who has made countless billions investing, Bitcoin is "a mirage."

Investment pits reward against risk. The higher the risk, the greater the reward -- or the greater the loss.

I prefer reward with a light seasoning of risk, so that's why I would never touch Bitcoin. Others have a higher risk adversion.

I am neither a historian nor a scholar, but I have read a lot of history. The current Bitcoin craze reminds me of the South Sea Bubble. Some people made a killing on that speculation, getting in and out at the right time. But many people were ruined by it.

For those still in Bitcoin with the price up, now might be time time for a hasty exit. Because what goes up always comes down, for everyone who makes a fortune, others will lose fortunes, and you should always buy on hysteria and sell on euphoria.