Bitcoin up over 1,000 percent in the last 12 months

Bitcoin up over 1,000 percent in the last 12 months
Bitcoin up over 1,000 percent in the last 12 months
Well, it's certainly been a thrilling 12 months for Bitcoin price speculation, with the US dollar price surging an interstellar +1,065 per cent higher, although by the time I've finished writing this post the gains will probably be even greater (click to enlarge the chart)! 
 
 

 

There were record highs today in other cryptocurrency markets, including Ethereum, and, for all I know, probably a raft of others.
 
Will the penny drop?
 
It's not worth me wasting time even pretending to have any meaningful or unique insights into cryptocurrencies as an asset class.
 
From a market psychology perspective, however, one assumes that many - if not most - of today's buyers haven't been around long enough to remember the dotcom bubble of 17 years ago. 
 
The worry with charts like the one above is that although new and existing participants become excited by the prospect of immediate gains, loss aversion - the tendency for people to be far more sensitive to losses than gains - can make the trip down very hairy, and sometimes catastrophic.
 
Of course, it's perfectly possible that Bitcoin is here to stay.

However, it pays to exercise caution when new and growing industries can have a nasty habit of chewing up and spitting out the brand names and entities that were once market leaders. 
 
In the shorthand parlance of internet chat forums: GLTAH!
 

Pete Wargent

Pete Wargent

Pete Wargent is the co-founder of BuyersBuyers.com.au, offering affordable homebuying assistance to all Australians, and a best-selling author and blogger.

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