Don’t Believe (All) the Bitcoin Hype
December 22, 2017
Bitcoin and blockchain mania has been the talk of the town recently – my relatives I never hear from have even been calling me up asking about it – but as the cryptocurrency becomes more mainstream there is a debate over whether it’s a currency or a bubble. Bitcoin’s value fluctuates by thousands in daily trading, and it’s been falling this week, down nearly 40% since reaching a record high of $19,666 on Sunday.
The hype may have hit a near-term peak yesterday as Long Island Ice Tea (LTEA) changed its name overnight to Long Blockchain. At one point its shares were up more than 300%.
Remember back in the day when a company could slap a “.com” on its company letterhead and the shares would go through the roof? That’s exactly what we’re seeing now with the word “blockchain.”
The LTEA news might have curbed euphoria in bitcoin stocks as most related names sold off. Riot Blockchain (RIOT) was down 23.5% on big volume and it’s down another 20% this morning, and Longfin (LFIN) was down 33% with another 17% coming off the shares today.
This is exactly why Patrick Byrne, the CEO of Overstock.com (OSTK) and an early adopter of bitcoin and blockchain, was on my show on Wednesday. OSTK was one of the first major retailers to allow its customers to use bitcoin and other crypto as currency in January 2014 and the bet has certainly paid off. The stock is up 300% in 2017 and crypto payments account for more than $100,000 of the company’s weekly transactions.
Byrne thinks that blockchain can change the world in many ways, and when asked if he thought a million-dollar bitcoin was possible he immediately said yes.
But while there is a fortune to be made in the cryptocurrency hills, there’s a lot of fool’s gold there, too. It’s important that you be careful and focus on the true opportunities out there.