I have written about cryptocurrencies twice but the price led by BITCOIN keeps on going up. Wealthy Chinese have been trying to take their capital out of china but chinese govt has clamp down hard ON CAPITAL OUTFLOWS and I think all other uses for Bitcoin currently pales in comparison to its use as a conduit for Chinese moving wealth out of their country. As little as a year ago, this was not the case. But right now, it’s pretty much a China thing.As Bitcoin has gone up, the Chinese have figured they can hold on to them once they get them, rather than converting them to western currency. So each new Chinese wanting to move wealth abroad, has to pay a higher and higher price for each Bitcoin. So in that sense, it kind of is a greater fool’s game.
Eventually, the chinese thinking is that with enough wealth held in Bitcoin, those holding them will be able to buy goods and services with them directly. Then Bitcoin will no longer be as volatile, and will no longer be any more of a fools game than other large currencies. Minus the debasement looting.
Now comes the real Fun. Mish shedlock did an online poll and asked people how high do they think Bitcoin will go and there it you have the answer below.
The greater fool theory is alive and doin’ fine….. it will till it can and when it reverses the fall can be dramatic. Think of any financial instrument as a pendulam , the higher the Pendulum goes in one direction the bigger the movement on other side . we have an live example of this BRAZIL ETF http://worldoutofwhack.com/2017/05/18/etf-tracking-brazil-market-down-50-in-todays-trading/ which fell 50% in few seconds of market opening this week.