What a day for Bitcoin!
What a day for crypto.
Yet again, that “fraudulent thing” proves its critics wrong…
Makes fools of them.
Your editor is no crypto evangelist… and we understand nothing of blockchain, proof-of-work, or any other crypto jargon.
But we believe we know when something is a fraud and when something isn’t. And that helps us understand why Bitcoin is (as we write) within touching distance of taking out its previous all-time high.
We’ll explain more below…
Market Data
The S&P 500 closed down 0.1% to end the day at 5,130.95… the NASDAQ lost 0.4% to close at 16,207.51.
In commodities, West Texas Intermediate crude oil trades at $78.75, down 97 cents…
Gold is $2,125 per troy ounce, up $32 from Friday…
And bitcoin is $67,502, up $4,821 since Friday.
And now, back to our story…
This Is What a Real Fraud Looks Like
At the time of writing (2:46 p.m. ET), Bitcoin is $67,242.
Its rise since the beginning of 2023 has been almost on par with its rise from 2020 to early 2021.
During that period, it went from less than $10,000 to nearly $70,000.
This time around, it has gone from less than $20,000 to (again) nearly $70,000… and now, with the presence of the long-awaited Bitcoin exchange-traded funds (ETFs), who’s to say it won’t go much further?
Source: Bloomberg
But as for frauds and Ponzi schemes, of course, some of those who shout the loudest should consider what goes on in their own “backyard.”
We talk, of course, of Wall Street. Before the launch of the Bitcoin ETFs, the biggest critics of Bitcoin were those on Wall Street.
The most well-known example is JPMorgan Chase & Co (JPM) CEO Jamie Dimon who was relentless in his criticism of it… before JPMorgan went ahead and launched its own cryptocurrency!
So, while Bitcoin has created fortunes for many investors (right now, with Bitcoin back near its peak, there shouldn’t be a single losing investor in Bitcoin), you can’t say the same for those defrauded by real Wall Street scams.
The most famous of which is that perpetrated by Bernard “Bernie” Madoff. A fraud to the value of $65 billion. The biggest scam in history.
Many folks lost life savings… or didn’t live to benefit from the recovery action in the years since the fraud came to light in 2008.
So if you want to know what a fraud looks like, don’t look at a Bitcoin price chart, look at something like this instead:
It’s a confirmation note generated by Bernie Madoff’s firm back in 2005. You can see the trade date — October 14, 2005.
It even has a settlement date… account number… trade codes… and a whole bunch of other stuff to give it an air of validity.
Not to mention the Manhattan address and the various agencies of which Bernie’s firm was a member.
In this instance, the trade was to sell 1,520 shares of Johnson & Johnson (JNJ). But there were never any Johnson & Johnson shares to sell. When questioned by authorities after his arrest, Madoff admitted his firm hadn’t placed a trade on any account since 1991.
These were nothing more than book entries… fakeries.
(By the way, we bought the above-pictured confirmation note as stock market memorabilia. A total waste of money, of course. And, incidentally, if we’d bought Bitcoin rather than this worthless piece of junk, we would have doubled our money since! But hey-ho.)
With Bitcoin reaching new highs again, we hope this finally puts to bed the idea that it’s a fraud.
Now, whether it’s a good investment for the short or long term… well, that’s a different matter. Something can be a bad investment without it being a fraud.
AT&T Inc. (T) has been a bad investment over the past five years… but it’s not a fraud. 3M Co. (MMM) has been a bad investment over the past five years… but it’s not a fraud.
And The Walt Disney Co. (DIS) has been a bad investment for the past three years, but it’s not a fraud.
Anyway, the bottom line is, we’re not quite there yet… but Bitcoin’s return to its previous high has felt as though it has taken a long time — even though it was only just over two years ago.
Maybe that’s because Bitcoin is unlike any other investment asset. It has developed a cult-like following that we haven’t seen or heard of from any other investment.
Perhaps it’s the wild price swings… price swings that can make you feel as though it has gone on for decades, rather than a few weeks or months.
Regardless, Bitcoin is back up there. If you sat through all those wild swings… and if you bought more, this (or the days ahead) is when you can raise a proverbial glass and tell the skeptics, “I told you so!”
You deserve it.
Oh, and Gold Is Up Too!
Not to be outdone, gold is up today too.
It’s at a new record high.
But no one seems to have noticed… except for old dinosaurs like your editor who prefers gold to Bitcoin.
We shall too raise our glass for sticking with gold.
More Markets
Today’s top gaining ETFs…
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VanEck Gold Miners ETF (GDX) +4.4%
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S. Global GO GOLD and Precious Metal Miners ETF (GOAU) +4.2%
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Invesco S&P MidCap Momentum ETF (XMMO) +2.8%
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Invesco S&P MidCap Quality ETF (XMHQ) +2%
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Siren Nasdaq NexGen Economy ETF (BLCN) +1.9%
Today’s biggest losing ETFs…
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Global X MSCI China Consumer Discretionary ETF (CHIQ) -3.5%
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iShares MSCI Chile ETF (ECH) -3.3%
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KraneShares MSCI China Clean Technology ETF (KGRN) -3.3%
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Global X Lithium & Battery Tech ETF (LIT) -3%
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KraneShares Electric Vehicles and Future Mobility Index ETF (KARS) -2.6%
Cheers,
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Kris Sayce
Editor, The Daily Cut