BITCOIN CRASH: Plunges 45% In 5 Days… How Low Will It Go?

The Bitcoin Crash has finally taken place as the king of cryptocurrencies plunged a staggering 45% from its record high in just five days.  On December 17th, Bitcoin reached a peak of $19,800 but fell to a low of 10,887 in early market trading today.  However, the Bitcoin price has recovered from its lows and is now trading at $13,500.

So, the big question to all the Bitcoin investors and crypto traders….. Will the market recover or will the crash continue?  Well, if we go by charts that show assets moving up in a straight line, I believe we are going to see much lower prices.  I don’t know if it will take days, weeks or months… but lower it will go.

The warning signs that Bitcoin and the other cryptocurrencies were in a huge bubble were all over the place.  I started to point this out in my November 1st article, BITCOIN vs. GOLD: Which One’s A Bubble & How Much Energy Do They Really Consume:

So, the big question on the minds of many investors is… which asset is more of a bubble, Bitcoin or Gold?  If we use the cost of production as a guide, my answer is Bitcoin:

Currently, Bitcoin is fetching an estimated $4,700 profit per coin versus $136 for gold.

According to the research done by Marc Bevand (discussed in the article linked above), he calculated the cost to produce Bitcoin in August was approximately $1,500.  I adjusted that cost up to $1,800 for the beginning of November.  At the time, the price of Bitcoin was trading at $6,500.  Thus, the profit per Bitcoin was $4,700.  Now, compare that to cost to produce gold from the top two primary gold miners at $1,115.  Thus, Barrick and Newmont primary gold miners were enjoying an 11% profit margin while the Bitcoin miners were enjoying a 72% profit.

And… that is when Bitcoin was trading less than half of what it is currently.  Furthermore, I presented this chart on Bitcoin’s cost of production:

Here we can see how the different estimated costs of Bitcoin production and the price movements.  A few weeks back I emailed Marc Bevand and asked what he calculated as the new cost of Bitcoin production.  He stated that it was between $3,000-$4,000.  I didn’t make a new chart, but with the price of Bitcoin heading towards $20,000, the Bitcoin miners were making upwards of $16-$17,000 a pop.  No wonder the price of Bitcoin finally POPPED.

In my next article about the cryptos on Nov 21st, SELLING OUT OF PRECIOUS METALS & BUYING BITCOIN…. Very Bad Idea, I stated the following:

There is a new trend by individuals in the alternative media community who are now selling out of precious metals and buying into Bitcoin and cryptocurrencies.  While this may seem like a good idea, especially when Bitcoin and the cryptocurrencies reach new all-time highs, it is likely a big mistake.  Now, I am not saying that individuals shouldn’t invest in cryptocurrencies.  Rather, it’s a lousy idea to sell all of one’s precious metals holdings and put it all into Bitcoin and cryptocurrencies.

Recently, Sean at SGTReport published a short video in which part of the headlined was titled as “SILVER BULL CAPITULATES.”  In the video, Sean explains how past frequent guest and precious metal analyst, Andy Hoffman, has sold out of all his silver and is now only in Bitcoin and gold.  Andy explains in his interview on Crush The Street that he sold all of his silver this summer as he really has no interest in it.  He goes on to say, “Because, in a digital age, I just don’t believe people are going to store thousands of pounds of silver hoping that the gold-silver ratio is going to come down.”

I have to tell you, not only do I find this sort of thinking, utterly preposterous, I also find it quite troubling that analysts who have been promoting precious metals for the past decade are now implying that gold and silver are no longer high-quality stores of value.  I disagree entirely with this faulty and superficial analysis.

Unfortunately, those analysts that moved away precious metals and into Bitcoin and Cryptos fail to understand the DIRE ENERGY predicament we are facing.  They believe we are heading into a BRAND NEW HIGH-TECH world with lots of neat new gadgets and billions of Dollars in cryptocurrency profits to live life PHAT on the HOG.

Well, as my favorite expression goes… GOD HATH A SENSE OF HUMOR.

It doesn’t take long for digital profits to turn into digital losses in the crypto markets.  However, nothing goes down in a straight line.  If we look at Bitcoin’s huge spike up to $1,150 at the end of 2013, it took a while for it to fall 75%:

As we can see in the chart, Bitcoin dropped from a high of $1,150 to $600 quite quickly.  It then bounced back up to almost $1,000, before selling off even lower to $500.  Although, this time around, Bitcoin’s plunge below 75% can occur much quicker…. even in days.  But, I am not going to make that call.  I stopped giving price targets for any asset classes years ago.  It’s a fool’s game.

Regardless, if we assume the latest Bitcoin’s mining cost is $3,000-$4,000, then we still have a long way to go.  Furthermore, here is a chart showing that Bitcoin’s transaction fees increased from 31 cents at the beginning of 2017 to $55 currently.  Thus, the higher Bitcoin goes in price, the more unusable it is for payment of goods and services.  Who wants to buy a $5 cup of coffee at Starbucks with Bitcoin if it cost you $55 for the transaction?

Moreover, how valuable is a cryptocurrency when it falls 45% in five days.  Again, Bitcoin reached a high of $19,880 on Dec 17th, and fell to a low of $10,887 today:

According to the current market price of Bitcoin, it is now trading down $7,000 or 35% lower from its high:

I have to tell you, that chart looks very UGLY.  Right now a lot of new Bitcoin investors are wondering if they should hold on or to sell before it goes down any further.  While some analysts have stated that Bitcoin will reach $50,000 and then $100,000… this sort of trading activity can drive a person crazy.

I don’t know if Bitcoin will ever reach $100,000, but I wouldn’t bet on it.  Mike Maloney put out his new Hidden Secrets Of Money Ep 8: From Bitcoin To Hashgraph: The Crypto Revolution:

Mike explains in the video that HashGraph will make a lot of the cryptocurrencies obsolete.  It takes a massive amount of energy just to do one Bitcoin transaction that it is not really useful as a currency or payment system.  The Hashgraph technology does the same sort of thing as Bitcoin and the other cryptos, but it takes very little energy.

As I mentioned in my previous article, the skyrocketing Bitcoin price is what has SUCKED IN most of the demand.  Only a small percentage of techie Geeks were interested in what Bitcoin had to offer.  It wasn’t until Bitcoin’s price went into the stratosphere that investors starting buying like crazy.  Now, we see Bitcoin mentioned on the major financial networks.

Again, nothing goes down in a straight line.  I wouldn’t be surprised to see Bitcoin rally here for a while.  It could actually go back up significantly before selling off again.  But, if Hashgraph can do with Bitcoin does at a fraction of the energy, then it is likely that Bitcoin will go down as the biggest Bubble in history.


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78 Comments on "BITCOIN CRASH: Plunges 45% In 5 Days… How Low Will It Go?"

  1. First!

    Merry Christmas, SRSRocco and rest of the gang! Even the silver haters, have a good one! We might not have long on this blue blip in space.

    Paid in Fiat

  2. If Silver went up by at least 5% today, it would mean that something important happened.

  3. How much currency can go into crypto’s? Billions, euro’s, dollars, bolivars, rubles and rumbles.

    Is it worth it? No.

    • BTW, your cost of production approach is awesome Steve. A tap on the shoulder straight out of the crotches of greed. Thanks for another ‘good one’.

      • Indeed, Steve’s COP graph is informative. It’s still difficult to wrap my head around the simple fact that the cost of production for bitcoin is effectively based on the difficulty of a math program. In other words, it simply isn’t real! I guess that makes Bitcoin “theoretical currency.”

  4. Bitcoin has always seemed to me to be a variation on tulip mania. Those that sold their gold and silver to buy bitcoin clearly never understood the true value and purpose of gold and silver.

    Block chain technology is brilliant and will ultimately find an expression that maximizes its advantages and minimizes its short comings. A perfect marriage would be block chain tech backed by real gold and silver. It would seem that a nongovernmental bullion bank entity, somewhat like the internet, that could act as the coordinator, control the information flow, fees and handle redemption’s would stabilize the crypto market, reduce the fees to reasonable levels and greatly increase their acceptability. Wouldn’t necessarily be limited to one, sort of like visa, mastercard and American Express.

    All of which is a long ways off and ignores the looming energy crises. Which is why I am sticking with gold and silver that I can hold in my wizened old hands.

    Thanks for yet another good one.


    • I read lots of comments for and against Bitcoin. Most comments are too narrow in their perspective, a) as if it is either PMs or Bitcoin, b) that Bitcoin is the only crypto in town, c) that energy usage applies to all cryptos, d) that a centralised entity with fewer participants has greater power than a decentralised entity with greater participants, e) that an idea can be suppressed as if it were something physical, f) that volatility is somehow not to be expected in a nascent market that maybe is less than 1% of mature size, g) that very clever developers are not aware of many of the shortcomings or problems with current crypto innovations.

      If you read thsi post by Dan Larimar you may find a lot you agree with
      But not all obviously 🙂

      PM’s + selective cryptos.

      Happy New Yaer and a prosperous one.

  5. Andy Hoffman is a disgrace and the way he treated Sean of the SGT REPORT is disgusting.Thank god Miles Franklin has the sense to sack him.
    Caveat Emptor . . .

  6. Joseph Goebels | December 22, 2017 at 3:18 pm |

    luv the Blockchain technology.
    Its here to stay.
    Bitcoin the penultimate Pump and Dump courtesy of the boys at Bankster Incorporated.
    Wont be long before Silver and Goldbugs are rewarded for their patience and foresight.

  7. Eventually bitcoin will go to its intrinsic value: ZERO. Bitcoin is yet another fiat conjured from thin air. The problem that fiat crypto currencies possess is that there can be any number of competing fiat cryptos that causes it to devaluate via inflation of the fiat crypto supply. So just because a crypto currency has a cap on the number of units in existence, does not mean that it cannot be devaluated.

  8. This website just posted a sell reco for cryptos so you can buy with both hands and leverage : huge payoff if the next few days if not hours.

    • RD,

      I did not make a SELL RECOMMENDATION. You implied that I did. I said, “BITCOIN CRASH has begun.” If you read the article in detail, which you never seem to do, you would have seen where I stated that Bitcoin could rally significantly for a while.

      However, if you want to play SRSrocco Report Devil’s Advocate, be my guest. If you want to jump into Bitcoin or the other cryptos… GOOD LUCK… LOL.


      • To sum up your positions if can go up, it can go down, it can go flat, it can last for a while or it can stop in a very short time frame.

  9. I don’t always agree with Steve, however, on this point he has nailed it. I am a financial tech programmer with deep understnading of blockchain and can tell you it is an absolute loser of a protocol. The idea is good, but the implementation (in bitcoin and others) is highly inefficient and impractical. Hashgraph, on the other hand, is something to be closely watched. The commentor who posted about the inlimited supply of cryptos is correct – just because BTC is limited to 21 million coins doesn’t mean I can’t take the source code (it is open source) change the name, add a few zeroes to the maximum, and now i have minted 21 trillion new potential coins to compete with bitcoin. There are over 1000 cryptos with market cap above $30 million as of this writing.

  10. lolol FUD!! Question is how low will the metals go??? Gold under $700? Harry Dent thinks so. My chart analysis has it around $650 by 2020 then it looks like a spike towards $2200 by 2021 ?
    Time will tell. BTW Bitcoin will most likely be $50,000 by then

    • joey,

      I wouldn’t put too much credit on what Harry Dent says. All he looks at is demographics. He has no clue about energy. Thus, he has no clue about the BREAK-EVEN based on COST OF PRODUCTION or THERMODYNAMICS. I highly doubt gold will go below $1,050-$1,100. Silver is now priced at its primary silver miners cost of production.

      However, the cost to produce Bitcoin is about $4,000. So, you do the math.


      • I have to stick up for Harry a bit here Steve 🙂

        What you say about Harry is probably (most likely) correct about his demographics obsession and lack of for-sight in energy usage and costs.

        I have read most of Harry’s books back as far as 1998; in fact “The Roaring 2000s” is one of the best books I have ever read. He is not wrong with his demographics if you understand them. And he has been more correct than many others I have followed. And no! He is not a mate of mine – Lol

        Our equities markets move exponentially; for moments in time they will increase 100% X 5Yrs or 100% X 6 or 7Yrs. The Dow Jones Industrial has for 85 years fluctuated atop a 100% X 10 Year exponential trend line. Buy at the right time you will increase your investment by 100% every 10 years. So “AGE” and “TIMING” are very important when making decisions. If you bought right in the 1960s, 1970s and 1980s at an age when you were 30 or 40 then asset wise, you are laughing all the way to bank, today.

        If you turned 30 or 40yrs in 1995, 2005 or 2015 then you have lost before you even start. Our monetary system is faulty and so are the finance markets. Our markets are now multigenerational. The “Baby Boomer” generation and their longevity would not have been considered by the bankers back in 1913.

        The next 40 to 50 years will obviously not be the same as the last; energy awareness is a no brainer; demographics will also be a player; the “Seneca effect” will probably be obvious in both.

        • I too have to add that Harry Dent is correct about Gold’s price drop though he does not say why he believes so. So I began researching and found that as each country has hit the skids, like Venezuela, they sell their gold!( Imagine 25 countries selling their gold at the same time!! Imagine 50! considering a black swan event that takes down half of the 197 countries forcing them to sell their gold at the same time! Then when investors see the price drop lower and lower they too will sell! $600 sounds about right! But at that price it won’t stay there very long.

    • The same Harry Dent also said that QE will lead us to deflation. Perhaps someday he would tell us that negative interest rate gives more benefits to the savers than to the borrowers.

      • Deflation has already begun! Everywhere retailers are closing their doors! Have you been to a mall lately? Or visited the business districts and seen the empty offices? Have you noticed the closing of car dealerships and major discounts on new cars? Have you been to a move theater and you can choose any seat there? I have watched the price of gem stones fall 30%! Deflation has already begun! But not in food, rent, electricity and medicine which has steadily risen!

        • Retail business has been collapsing in Venezuela and I can choose a seat in any cinema in Zimbabwe. Should I say that a multiyear deflation is happening in those countries ? Have you ever heard the word “impoverishment” ? It was very popular in 19th century.

  11. Steve, interesting post by Gail Tverberg titled “The Depression of the 1930s Was an Energy Crisis”

    • Rodster,
      Thank you for the link, Gail Tverberg is most excellent! I had not thought of Peak coal as the catalyst of the 1930’s depression but she pretty much documents it. This should as well put a smile on Steve’s face.

  12. Would love to support your efforts but my policy is to donate only in crypto.
    Make the change and I’m in.

    • DjangoScat,

      I suppose your local gas station and grocery can’t wait for your crypto payments. Just a weird way of saying you are just a cheapskate.

      Pony up or get lost.


  13. daniel reiner | December 22, 2017 at 8:24 pm |

    What goes up must come down. Always has. Always will.

  14. they’ re scrambling to get fresh buyers so pulled a plug for short in but to no avail I would think…

  15. Steve, thank you for the hashgraph information, hearing a bit about it. The Economist in 1988 postulated a new world currency in 2018. How did they pick this date? Astrology. Uranus, the shocking, electrical, rebellion planet, enters Taurus, the sign of money in May, 2018. The Phoenix coin, rising from the burning ashes of the old fiat, has a “phi” Greek letter symbol. Phi also represents the ‘golden ratio’ in physics/math. The original “phoenix” was the first coin of the modern Greek state in the 1800s. It had an Orthodox christian cross on the coin. The proposed new coin is associated with a fleur de lis many connotations, there. Phoenix dies and rises from the ashes every 1400 years according to some legends. 618CE, interesting times.
    “Millionaires don’t need astrologers, billionaires do.” – JP Morgan

    • Call Bo Polny, quick ! Only he can guide us to decipher these monetary-astrology riddles.

    • Since the establishment of the Federal Reserve, every 40 years there has been a new monetary system. Because the US is the worlds reserve currency they approximate an extra few years.

      • You forgot to mention: when the reserve currency is reset, all other currencies should also be reset. All of them are the derivatives of FRN.

  16. Down 45% in 5 days but it doubled in 7 days right before…
    Obviously they can manipulate it but I don’t think they can kill it.

  17. Just because bitcoin crashes, doesn’t mean silver is going to the moon. Silver has already had it’s spike and crash.

    And if you think fiat currencies are worth zero, go anywhere in America and try buying anything with gold or silver coins. And then try buying something with your dollars bills or your debit or credit cards.

    Try that experiment and get back to me with what works.

  18. Chris in Arkansas | December 22, 2017 at 11:10 pm |

    Dolph – Same old tired argument. Sell the gold or silver for cash as needed then buy what you want. PMs are a store of value not a widely accepted medium of exchange. However, I’ve been able to make some very fair trades using gold and silver and vice versa. You’d be surprised how easy it is.

  19. Dolph,

    Cash is, as you say, easier to use, of course. And though arkansas has had success transacting with it currently i would say this is far riskier then cash because it is an advertisement to the locals that you are keeping wealth at home outside the banks.

    But the argument for pm is that cash is worth less every year (with possible exception of basic non processed food stuff) whereas pm has about hit bottom and is not debt based. If you don’t want to follow or agree with Steve’s thesis you should at least grasp that much.

    More importantly, the petrodollar and it’s reserve currency status is vanishing and will finish quite abruptly, bringing hyperinflation and end of America above banana republic level if that. Starvation. Currency change also, except this time your old Jacksons will not be redeemable. maybe will be the tubbman dollar already in the wings waiting but whatever.

    So people look for an energy unit outside the system to some extent and if you have enough horse sense to see what is happening around you you might find such a refuge attractive. If you lack that basic sense which is approachable from many angles i can’t imagine why you are on this site.

    trouble with silver is that our lords hate it and when manipulation necessarily ends they will likely continue oppression by outlawing the sale of it. We get worthless cash and worthless silver! how exciting!

    Very simple and easy to do. Maybe declare silver so rare it is a national security issue and they need it for miltary and essential industry. Nationalize the mines also. So little in private hands they won’t care if you bury it.

    So everythings a gamble, no comfortable or easy answers. gee what a novel concept! Bet nobody ever thought of that before.

    Would encourage some forum comment here as to whether gold or silver is safer as far as such capital controls.

  20. Sammy,
    tell more about the phoenix picture if you want. It does look cool, but have very little time to research anything. Like why is
    economist mag relevant and especially so long ago and could a guy find practical relevance to it if he doesn’t hang with astrology? Which i don’t. Do you really think the jpm types believe in astrology? I.e is that the picture’s sole foundation as a prophecy?

    • Frank, all I know is what I have read from others. That The Economist is a mouthpiece of the banking/monied elite. I do know, for some reason, this group telegraphs their moves ahead of time if you know where to look. I did a little research on the mythical Phoenix and fleur de lis which could be occult symbols in this context. Symbols are powerful and used by the control grid. The astrology for 2018 is easy to research. Whatever the plan is, probably won’t benefit everyone. Interestingly, none of the current cryptos have a Phoenix type name currently. Good luck.

  21. cool if this site had a more forum like setup where threads/conversations could continue without ending when new post put up. Dust in the wind

    Course that takes money maybe. no idea what’s involved. thinkin more people might contribute if additional avenues given to do so then current one.

    May more light dawn for us all in the coming year.

  22. Steve,

    Thank you for the very interesting analysis on energy/cost of BTC production and its impressive increase from a few hundreds in 2014 to thousands nowadays. This is a ringing alarm bell. A lot of wasted energy to produce something that is not tangible, created from thin air and backed by nothing…
    Hashgraph technology however looks worth following. Will you discuss this soon?
    All the best

  23. Very good point, SD, about Bitcoin having intrinsic value apart from it’s production cost due to the value of the system itself for those qualities it provides that you describe. hadn’t thot of it that way which probably shows how new i am to looking at it. I guess though that from what little I’ve pulled together i’m not too convinced yet that it does all that, particularly doesn’t seem too anonymous, even “psuedo” but hey, i could be wrong.

    Just yappin here cause would sure vote for Steve addressing your point.

    Only thing I’m sure about crypto is that even if they do make it as private as cash I consider a world where you have to carry a smart phone with you everywhere is enslaving , just in itself, and additionally tracks you and even can monitor your conversations. Not tin foil hat bs.

    Off topic maybe but one thing i don’t get and never see addressed is how we are supposed to have a currency based on PM. Nobody I’ve seen who pumps metal at the end of their doom speech ever addresses this, but then while i try here and there time is limited and maybe i just not reading right stuff or too scattered.

    But seems like currency is only really backed by gold if it is truly redeemable for gold and if it is everyone just takes gold and runs? anything else not truly gold backed so no power behind it. so how can we have a reset? maybe stupid beginner to economics quandry but sure would appreciate answer. this stuff bugs me. I’m interested for some reason but got like an hour a day and just used it up.

    Basically, I,ve done okay and managed some degree of honest independence by being a cautious paranoid skeptic and figuring stuff out for myself but this not working to well anymore cause change too rapid and complex and less free time, less money and everyone just talking their book. Too many angles. Needs to be simpler and more honest or we are all going down.

    • Nobody is required to carry a smart phone around, but the vast majority choose to. I understand the desire not to, but that seems almost irrelevant to most users. Tell the average college student they are being tracked by their phone, and why would they even care? They already post everything about themselves on Instagram, Facebook, and/or other social media platforms. The young generation will take to crypto as if it is second nature, and wonder why it wasn’t here sooner.

      Having a PM based currency in today’s digital age is highly unlikely. Guys like Peter Schiff try to sell people on programs like GoldMoney. I listened to him on a podcast with Joe Rogan not too long ago. He rips on crypto, and then tries to hype this GoldMoney thing. Where my gold is stored by some trusted third party and when I spend my $$$ with their unique debit card, it deducts the real gold from my account with their “secured vaults”. Sounds great. Until you realize you have a half dozen counterparty risks. From the company itself, to the vaults, the rehypothecation risk, the audit risk, the government of the country seizing the gold (that is competing with their fiat dominance), etc.

      If you want to truly understand the power of crypto, go to the YouTube channel of Andreas and watch all his videos: He understands both the tech, and the practical and theoretical issues and solutions and why bitcoin/crypto is the future.

  24. Riding the wave.Litecoin down to 200$.I bought some at 250$.All crashs ends at a higher high.
    That’s easy.

  25. I know how much you want all these digital coins to go to zero because there is no energy to back up their value but we have a few more years to go before that happens.

  26. This was an orchestrated “smash and grab” by TPTB. The sector is recovering nicely. I have been in BTC since $ 200 and these types of corrections are pretty normal and so are the quick recoveries. My portfolio was set back about 10 days. It looks like the end of the year return for my crypto portfolio will be around 25X. I predict the naysayers will keep predicting BTC to zero while it advances to 100K and beyond. What a missed opportunity for the arrogant and closed minded.

    • GLP,

      I wish you all the luck with your Crypto Portfolio. I think you are going to need it. However, for Bitcoin’s transaction fee now to be over $55, why on earth would anyone want to use it?? Also, if you read the article and listened to Mike Maloney’s video on HashGraph, it makes most of the cryptos obsolete. So, the only thing they are worth now… is a HUGE SPECULATION.

      Also, who the hell is going to use these cryptos as payment system when they can go up or down 40-50% of their value in a few days. Totally ridiculous.

      Clive Maund put out a WARNING to those who were smart enough to get in at $200… BEST SELL WHILE YOU CAN.

      Sure, Bitcoin and the cryptomarket will likely rally from here. However, we haven’t seen the lows yet.


      • Bitcoin isn’t the answer, but cryptos do offer promise. Do I think the Fed will ultimately issue their own, absolutely, but until they do this is where the people of the world will go when their currency gets blown up. Its just to easy…

      • Steve, I did a bitcoin transaction yesterday. Paid 0.001 bitcoin fee ($15) and it cleared in 30 minutes. Guess what, I’m not buying coffee with it – but who cares. If I want to buy a coffee, I can use LTC, PIVX, QRL, HYP or about 20 other cryptos with near zero transaction fees and fast confirmation times. I use bitcoin as a payment for large items like cars, land, real estate, fine art or other investments. Why is this a problem for you? You lament crypto but it is only 9 years old. There are growing pains. The user interfaces need improvement; and they will be coming soon.

        HashGraph is speculation and theory. It is NOT open-source. There is so much going on in the crypto space right now and HashGraph is just one of many projects trying to outshine bitcoin. Good luck.

        You talk about “what goes up in a straight line, can’t do so forever and most come down” but here is where you lack vision. What you are watching is a slow shift from government issued, inflated, debt-based fractional reserve type money systems – to a trustless, decentralized, mathematically proven emission based, non-debt, public consensus based monetary systems. Cryptos are better in nearly every single aspect to fiat, and better in multiple categories compared to PMs. So you see a bubble, and I see a fundamental shift in how we view money… and we are just getting warmed up.

        Companies will start accepting crypto. Some will convert back to fiat immediately through companies like BitPay. Others will smartly keep 1-5% of the revenue in crypto….because their employees will be asking to be paid in crypto! Within 20 years, a company not offering its employees at least a portion of their salary in crypto will be the exception. You aren’t getting into crypto on the very ground floor, but we are nowhere near the Penthouse yet.

    • It is not a case of arrogance GLP It could be sour grapes for a time; in the end it will be called for what it is REALITY.

  27. “Who wants to buy a $5 cup of coffee at Starbucks with Bitcoin if it cost you $55 for the transaction?”

    That question does a perfect job of nailing a point like a dead insect to a specimen board. And should be pondered by gold only folks as most believe it will always remain at a multiple of silver. Therefore, I am content to be swimming in silver dimes, the best fractionated form of silver, and saw my fingertips change color many times as I was able to cherry pick them all for lack of wear. They are still available and have the added boost of collector demand for starter sets. Franklin Sanders seized on dimes too. But keep some three niner also as it is industrially “ready.”

    My local dealer gets charged 1% for accepting debit cards for dollar demand deposits so I give him cash as long as it’s available or as long as silver is a buy. He has no plan to accept crypto “funds.”

  28. Bitcoin might go up again. It may be early to say it is crashing, that is to say it has lowered in price but may go up higher. Speculation will not truly end until most of the speculators dump their position. Silver is an industrial metal so speculation is not the true driving force for price (but the government manipulation is a driving force for PMs until the mining greatly reduces production because of limited supply and depleting concentrations). So crypto-currencies need speculators but silver and other industrial metals do not. I would rather invest in something that is always needed than something that is not. Of course there is nothing wrong with betting on speculation if you profit.

  29. Steve, thanks for wishing me well. What is happening is the result of Quadrillions of fiat chasing Billions of cryptos. OBTW I still have all my physical metals but sold ALL my Bow Wow PM stocks to get into Cryptos. That was the best decision of my life. The crypto sector is not going away and this new technology is revolutionizing the current business model by the implementation of trustless, decentralized disinter mediation.

    • GLP,

      I gather you DID NOT READ the article or listen to the last part of Mike Maloney’s video on Hashgraph. No worries. Anyhow, the notion that Bitcoin and the cryptos are surging higher due to the destruction of the Dollar does not past the smell test when we know in fact that 40% of the trading of Bitcoin are from Japanese FX traders who left trading FX-Contracts (fiat currencies) at the beginning of 2017 and moved into the cryptos.

      I am sorry to say, nothing that goes up in a straight line, lasts. NOTHING. But, you are more than free to believe that THIS TIME IS DIFFERENT.


      • Steve, the great influx of money came from South Korea who are very concerned about having to leave their country if war brakes out with North Korea or the US lights up North Korea which will make living in South Korea impossible. The other source if the influx of money into bitcoin was from India where there 50 and 100 rupee fiat was declared worthless by the government. The Indians tried to buy Gold but the government started confiscating it ( the only option they had left was bitcoin.
        As the governments become more desperate to take the citizens finances the citizens will try to keep what they have. The only place to put their money will be bitcoin. So the question is will more governments become more aggressive toward the citizens money? If yes then bitcoin will go up! Will governments cease taking their citizens money? then bitcoin will go down. Trust is everything!

  30. Crypto Currency,,,,hum not crypto money. Why must everyone create the strawman by comparing curency to money?
    PM’s are money, always have been and always will be but history shows in various times different forms of currency has been used to easily transfer money (wealth).
    Most of these currencies are gone by the wayside because of the lose of confidence in them which in most cases was caused by inflating the currency. The dollar comes to mind.
    Society does not want to physically carry various amounts of PM’s around to conduct commerce. Society constantly seeks a currency to use to conduct commerce. A currency which cannot be inflated, cannot be counterfeited, can be stored safely, and easy to transport.
    It is my opinion we may very well be in transitional time from one currency to another,,,dollar to digital.
    Truthfully we are deep in this transition because far more dollars are moved digitally than physically now.
    But where is the confidence?
    Again my opinion is that crypto currencies should be compared to govt fiat rather than PM’s,,,, not apples to oranges.

  31. Just a thought:
    One can easily find 1500% gains of cryptos in last 6 mons even to the bottom of recent pull back.
    If one should take only 10% of PMs, invest a n cryptos and gain 1000% on that amount, then convert back to PMs, one could possibly double PMs holdings.

  32. I am amazed on the current misunderstanding in this sector. There are:
    1. Crypto currencies, i.e peer to peer digital cash
    2. Platforms, operating systems
    3. Tokens, software that run on the platforms.

    Besides, Bitcoin is for great wealth and Litecoin is for buying your coffee. OBTW, try transferring 100 million of gold across the world with low fees and no government involvement.

    This is a technological revolution and trying to frame the argument of Gold vs Cryptos shows extreme ignorance.
    You can make the case of gold and silver stocks vs cryptos, both digital but one actually makes you money LOLOLOLOL

    Oh yes, and then there is Jim Rickards Hyper Ledger ( people who didn’t see it coming but know for sure what is going to stop it )

    • GLP,

      Again, I can tell from your comments that you DID NOT WATCH Mike Maloney’s video. Shame on you…LOL. If you had watched Mike Maloney’s video, he discussed cryptocurrencies in the first part of the video. In the second part of the video, he interviewed the founder of HashGraph and why it makes Bitcoin and the other cryptocurrencies, for the most part, obsolete.

      Now, you are more than welcome to continue regurgitating the same Crypto-token stuff all day long. However, WHAT GOES UP IN A STRAIGHT LINE, normally comes down the same way.

      Lastly, I gather you have no clue about our dire ENERGY PREDICAMENT, the FALLING EROI and the soon collapse of Global Oil Production. If you understood those dynamics, then you would understand that a new HIGH TECH world full of Trillions in Crypto Profits isn’t a viable scenario in the future.


  33. “Hashgraph at this stage looks unlikely to unseat blockchain.

    “Until Hashgraph releases the core code as open source, and they are able to gain a real user base it poses zero threat to blockchain,” said David Moskowitz, co-founder and CEO of Indorse, a decentralized professional network company based in Singapore.

    “There are dozens if not hundreds of new blockchains claiming to be superior to Bitcoin, but until they gain significant community support and are truly battle tested I do not see them as more than long shots,” he said.

    Of course, that doesn’t mean Hashgraph can’t develop into a force within the crypto world.”

  34. Crypto coins are nothing more than ETB’s – Electronic Tulip Bulbs.
    A purely fictitious form of wealth.
    Depending on a computer system for their survival.

    • One can say the same of the dollar, in fact it would apply to the dollar more than Bitcoin because just as with tulip bulbs there is endless supply of dollars.
      Computer system goes down no more credit or debit cards.
      I find it pointless to consider viable internet in this disscussion because if no power, we are screwed no matter what.

  35. We have to ask first ,why Bitcoin is so expensive ??!! if we compare it to Gold.
    This is Ponzi scheme run by Big Banks!!! , nobody knows who owns what. Bitcoin can’t be currency , because it’s going up and down like yo-yo.
    Cryptocurrencies maybe going to be used in future , but they have to be issued by Them , Masters of Universe.

  36. Recently I have read JP Morgan bank has amassed a hoard of more than 675 million oz. of silver and China is stockpiling more than a billion ounces. This should put a floor under the silver price. Also silver is sitting right at its cost of production. China will probably begin trading oil for yuan soon, with a convertability to gold. China is stockpiling every commodity. China is going full speed ahead on The One Belt/Road infrastructure. I see this coming economic atmosphere as a rhyme of early 2000s, commodities will be rising again. Except instead of Kondratieff winter deflation, spring inflation is beginning to show. The Fed. is behind the curve. Gold is the ulitmate, accepted store of value for trade. It will rise and drag silver along. Silver may also have new industrial uses especially in energy production and storage. Gotta stay nimble, flexible and lucky.

  37. My concern with a new money being pushed on us, no matter the form is what happens to debts taken out in the old money? Do the creditors get damaged as the old money is worthless or will the debts be rewritten in the new money of which the debtor has none? I am not smart enough to figure this out. I need more research. However, my goal for several years has been to completely be out of debt. Thank God, that has become possible. I don’t even use my credit card anymore. My strategy is to be small and under the radar.

  38. Wow, watching the Mike Maloney videos on money @
    I guess we are still in Kandratieff winter as he is predicting a severe deflation when the credit bubble bursts. The peaks of many cycles occurring now. Chaos is heading our way. Even though I may have had the reasons wrong, glad I am out of debt. The PMs may suffer for a while longer, too many cross currents. But he says hyperinflation will follow the deflation. That’s because all the money creation since 2008 will finally come home as the Kondratieff cycle turns to the inflationary spring. Not nice to try to fool mother nature. Dangerous and chaotic time.

  39. Mr Maloney has a very good “Fingerspitzengefuhl”, but nothing about energy. Out of the matrix, check. Monetary collapse, check. Knowledge about currencies and money, check. Insight in the crypto ‘markets’, check. Energy, fail. But ok, he’s a Steve like person in my opinion. Add him to your knowledge portfolio.

    • Yelp, energy is the elephant in the room. No energy the paridigm changes.
      Everyone with enough sense and gumption to investigate economic conditions knows this but Steve is the only one who is willing to lay it on the table.
      But until it happens one should attemp to increase assets for the future as much as possible and right now cryptos are the best game in town.
      As mentioned earlier 10% of ones pm holdings gaining 1000% in cryptos doubles ones pm holdings. Maybe 1% of investing public in cryptos now and folks think bubble? Think cell phone.

  40. 41 million people in the good old USA live in poverty. Most here are spoiled. Many in the world are in desperate situations and want a way out. Some 60% of world fiat is U$ dollars, they don’t like us. Gold is too hard to transport. Cryptos currencies are solving problems for desperate people.

  41. I’m an old-fashioned kind of guy. To me, an ‘adviser’ who, by taking his own advise, has accumulated a respectable level of material wealth, is living proof that his views are correct. We get so many ‘experts’ here on the net who know everything but have actually a terrible track record. They have negligible net worth! Steve is a consummate analyst who understands some basic principles of economy and finance. Yet – he sounds like a broken record. Year after year after year Steve is predicting that his EROI analysis will eventually bring home the bacon for ordinary folks. How has that worked out for you, Steve. We all expire in the long run. At some stage in our limited lifetime, we all would like to get some kind of reward for ‘being correct’. Well, Steve – I’m waiting for your EROI to pan out……………….. meanwhile, BTC investors have, at least, been able to take a real payday. Rather than banking on eternal hope………….

    • Peter, Steve’s analysis of EROI is SPOT ON! But with the Alogo’s (Intelligent programs) taking the place of market controllers on the exchanges they control the trading and apply shorts and longs where necessary to keep the market stable. These algos are as powerful as the those that controlled the mars landers on reentry! They are there to keep the market stable and rising, this has never happened before. The stock market and exchanges were originally designed upon ledgers that were hand written and never exceeded 1000 transaction a day!(9:00 to 5:00pm) remember seeing ticker tapes in the old movies? But now transactions are happening in the billions every second! This is Artificial Intelligence at it’s finest! Computer power usage is halving every two years and with the next iteration we will see power for a computer drop to 10 Watts!! and not 150- 50 watts as it is now. ( they are building them now.) Processors are down to the 10 nano meter size, the human hair width is 100 nano meters. Artificial Intelligence is doubling every 7 months. Yes Steve is “SPOT ON” but the question is how long can Human ingenuity control reality? I suspect up to the time when the artificial Intelligence with all it’s contingencies from the past hits a “black swan” that never existed in the past. Ironically it is the algo’s that are creating an environment for a black swan! Amazon, Google, and Cisco have prepared for a “black swan” event but also continue to move forward as if it will not happen. It is called hedging! Do I have food stocked up? Do I have Gold/silver? (Apple has stocked up on silver!) Hey I have even bought some chickens! If there is a black swan, you have gold/silver to take care of your local needs but long distance, helping a family member in another state or country, then having some bitcoin will allow you to help them. Hedging is a good thing.

    • Tsar Nicholas | December 26, 2017 at 8:05 pm |

      Peter – The fossil fuels that we rely on were created over large stretches of geological time (millions of years)and we have used them up in maybe two centuries. In that context, five years or ten years is nothing.

  42. Doesn’t anyone have any friends in the crypto-currency community? Everyone I know took profits for Christmas or sold 50% of bitcoin holdings to buy it back, knowing it was going to spring back up. It always drops during the holidays. Me I used my profits to buy a monster box and take my wife on a vacation. Most of my friends bought gold or silver and presents and set cash aside to buy it back when it hit bottom.
    Bitcoin is the standard of the crypto currencies. when it goes down all go down and when it goes up all go up. It’s a protocol like SMTP, POP3 (email) or Hypertext Linking (HTML) or VoIP (telephone/Cell phone). It no where near saturation but it is following the same growth curve as email, HTML and VoIP.
    Why does everyone think because they put fiat money in the bank it went into a box with their name on it? Their fiat currency is not in a box with their name on it! It became digital 1’s and 0’s. When you use any money transfer (SWIFT transfers) do you think they are really moving money from one place to another? Or are they simply debiting one ledger and crediting another?
    All bitcoin is a distributive ledger that reaches consensus not in 30 days or 10 working days! like credit cards or SWIFT transfers methods but in less than an hour!
    Gossip protocol ( like in hashgraph) is great for corporate networks but if it tries do what bitcoin does it will be toast! Bitcoin is Euclid geometry providing for the first time in human history an “artificial absolute time” with the use of the blockchain. This changes everything! Because time is local perspective NOT global. But bitcoin provides a standard of time that is gives civilization a reference that can be used in everything! Bitcoin is NOT static but dynamic changing and growing and adapting to the needs and demands of the network. The Bitcoin of today is not the Bitcoin of last year. ITS A PROTOCOL that does NOT need third party intervention. This is the same as before where gold and silver go from one persons pocket to an other’s pocket, except your pocket is an application called a wallet and the values are recorded on a distributed ledger that everyone has, not some third party bank!
    Just like the internet and other protocols NO ONE OWNS IT! It is open source! It is controlled by everyone who participates just like all those in antiquity accepted gold/silver and participated in accepting and using gold/silver. Because it is a protocol like SKYPE (VoIP protocol) it will grow in value as it is used, The more people put into it the higher the value, when taken out the value drops! Everyone’s account in the bank is digitized in 1’s and 0’s, why not hold it yourself rather then pay someone to hold it for you?
    Speaking of protocols the new ID protocol will be standard in less than 2 years. As well as the network speed for the “last mile” should double in 2018 and be less than 1/3 the price your paying now.
    I wish you all a Happy New Year!! because it will be!

    • DisappearingCulture | December 26, 2017 at 7:14 am |

      “…Everyone I know took profits for Christmas or sold 50% of bitcoin holdings…”

      Since somewhere between some and a lot are not going to forthrightly disclose their profits on their tax returns, when major Western governments decide they want their taxes on capital gains, some of those profit-takers are going to be selling remaining Bitcoin [& other assets] to pay taxes due.
      Things may get interesting then; if a lot have to sell for tax assessment this will create a price/value drop.

  43. Ok I guess I give up. I put my money in a 401k specifically index funds but everyone is saying it’s overvalued and about to crash. I bought a significant amount of silver starting around 2006 but they say that is being manipulated to suppress the price. I discovered Bitcoin and bought a few starting in late 2013 but now that is also in a massive bubble. I guess I should have invested in fast cars and loose women!

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