Don’t get me wrong, Buffett is a very smart man. And a very smart investor. But he freely admits that he doesn’t invest where he doesn’t understand. And he freely admits he doesn’t understand bitcoin or cryptocurrencies.
What you need to understand here is very simple. Warren Buffett is an expert in companies and stocks. He’s been around long enough to know a thing or two there. In no way am I challenging his reputation or expertise in traditional markets. But he knows nothing about cryptocurrencies.
You might know that there are various cryptocurrency exchanges all over the world. And depending on investors, prices can differ extremely. Investors in Singapore may value bitcoin higher, giving it a higher price than in the US. One place this has happened in is South Korea.
Computers don’t worry about rationale. They just do what they’re programmed to do, which eventually exacerbates the prevailing trends. But don’t forget, humans program the computers. Human nature is behind all market cycles. It’s just that this cycle is being helped along by the desire to make gains based on unemotional computer generated decisions.
The companies that will really benefit will probably not have the word ‘blockchain’ in their name. They will be companies that can strengthen their position by using the technology. Or by making themselves crucial contributors to the data value chain.
In a recent interview with Fox Business, Dimon said, ‘The blockchain is real.’ He even says he regrets his previous comments. And that he now has ‘concerns’ about how governments will feel about bitcoin ‘when it gets really big’.
CoinMarketCap (CMC) is easily the most well-known aggregate of crypto prices. It’s the closest thing the market has to an index and is frequently cited for up-to-date prices. However overnight, CMC managed to crash the market.
If you bought digital coins in 2017, you would have had a great year. Making more than 12-times your money was as easy as buying a single bitcoin. 2018 might be more of the same.
In the 1990s, speculators flocked to the biggest speculative opportunity they had seen in their lifetime — tech stocks. As it happens, right now, folks are calling the top of another great speculative market — cryptocurrencies. If some of my colleagues are to be believed, this is the biggest speculative boom, not just of our lifetime but of all lifetimes.
Dotz Nano Ltd [ASX:DTZ] shares are up 24% in early trade today. The upswing comes after the company announced it had agreed to a distribution deal in China.