Written by 12:16 pm Bitcoin

Bitcoin & Beanie Babies – The Gilmer Mirror

By Jim “Pappy” Moore

Bitcoin is all over social media. To some it is the wave of the future, which reaches across the boundaries of countries and throughout the world, dominating world economic matters. It is digital money, with a Bitcoin being of whatever value a seller will sell it for and a buyer will buy it for. In this sense it is similar to gold or silver, with one important difference: gold and silver both have actual commercial value in the world. They are minerals. They must be mined, refined, and put into useable forms. They have manufacturing applications. They have markets as jewelry. They are a worldwide commodity which is sold daily on the basis of ounces or grams. 

Bitcoin is more similar to Currency, such as dollar bills, than it is gold or silver. It is not a product which has any true economic value beyond the reaches of the agreement by those who traffic it. Currently, Bitcoin is selling for about $20,000 each in U.S. Dollars. About 9 months ago Bitcoin was selling for about $67,000 each in U.S. Dollars. Two and one-half years ago Bitcoin was selling for around $3000 each in U.S. Dollars. 

What else have we seen in the past thirty years which has experienced such volatility? Beanie Babies. Little stuffed toys which originally cost a consumer $2.50 U.S. Dollars became much sought-after items. Demand went off the charts for some of them. They were traded among those who invested in the thousands of dollars. The rise in values was part of a brilliant marketing plan by the man who made them. Ordinary people began investing their life savings in Beanie Babies. Many spent thousands of dollars buying up all the Beanie Babies they could find. An industry of Beanie Baby buyers was created on the fly. I personally knew someone who owned hundreds of them and thought they had transformed their savings into something that would give the returns in the thousands of percent increases.

There are still Beanie Baby collectors and some items sell for thousands of dollars. But the boom is long gone. Many people ended up with Beanie Bears which retained little value. Sizzle only goes so far and often does not last.

Bitcoin has been a hot item the past two years. It has caught on among a certain segment of the world’s population. Millions of people are into it. As Bitcoin has fallen in value by 70% the past eight months, its proponents have preached “buy the dip!” Ask yourself: Why would people invested in Bitcoin strongly encourage others to get into it if such people truly believe it is undervalued greatly? Wouldn’t such people be gobbling up the Bitcoin sold by sellers at the much cheaper prices? Wouldn’t they encourage the sell-off and buy all they could get at the “cheaper” prices? But what if their goal was to get others to stay in Bitcoin, to not sell-off? Can we infer that such Bitcoin owners are merely trying to stop the bleeding on their investment?

I am not impressed with investments which require owners to join a club of true believers, and from that rainbow and unicorn world they see value that is not truly there. To me, it has the feel of a pyramid scheme, where those who get in early make money, but those who get in late do not.

This is my opinion. Yours may be much different. 

Copyright 2022, Jim “Pappy” Moore. All rights reserved.

Source link

Close