- The Motley Fool announced a $5 million Bitcoin purchase yesterday after years of bashing it
- The u-turn is one of the most surprising the space has yet seen over Bitcoin
- We run through some of the things The Motley Fool have said about Bitcoin in the past
The Motley Fool has been one of Bitcoin’s biggest critics in recent years, taking every opportunity to denigrate it compared to their precious stocks and shares. After years of Bitcoin bashing they stunned their readers yesterday by announcing the addition of $5 million worth of Bitcoin in their new 10x Portfolio, listing the same fundamental reasons that Bitcoin believers have known about since 2008.
To celebrate The Motley Fool’s u-turn, and to illustrate just how surprising it is, we take a look at some of the things their journalists have said about Bitcoin in the past.
Don’t get me wrong — if anyone wants to give me anything that’s readily converted into coin of the realm, I’ll gratefully accept it. After all, a ‘thing’ that has increased in value from a little over $700 about a year ago to around $10,000 today is not something to turn your nose up at. But I’d keep Bitcoin only for as long as it takes to sell it, and it would certainly never figure in my long-term investment plans.
As I type, Bitcoin remains extremely unstable, unregulated, owned and controlled by a small cluster of individuals, and its intrinsic value remains a point of fierce conjecture. What is also clear is that, with a lack of obvious drivers, it’s quite possible that the cryptocurrency will continue its price plunge into 2019 and possibly thereafter.
So quite why anyone would choose this asset class in which to invest their hard-earned money instead of stocks is beyond me.
There’s no denying Bitcoin has created a lot of wealth for some people over the past five years. Unfortunately, as the crypto market has boomed, so has fraud. Hundreds of millions of dollars worth of Bitcoin have been stolen or lost and, due to the nature of the asset, it’s almost impossible to trace where they’ve gone. At the same time, it’s not got any easier to make transactions using cryptocurrency. Fees are still relatively high and can take days to transact.
At the time of writing, Bitcoin’s price has fallen to around £5,000. This might look cheap compared to its trading history, but we’ve no way of knowing whether the current price represents good value for money. That’s because the Bitcoin price doesn’t trade on fundamentals. The price is entirely dependent on sentiment… it’s only worth as much as other investors are willing to pay.
The upcoming halving procedure doesn’t impact my personal view of Bitcoin. I’d much rather put my money to work on share markets. Why? Well I don’t consider an asset class that remains as volatile as this to be an attractive investment target.
The long-term future of cryptocurrencies remains up in the air and the Securities and Exchange Commission continues to rebut proposals for a Bitcoin-backed Exchange Traded Fund. I’d much rather continue to use my money to invest in share markets.
Instead of Bitcoin, I’d buy stocks and shares to make a million. Some shares have actually outperformed Bitcoin over the past 12 months. Growth and technology stocks have performed exceptionally well in the coronavirus crisis, as customers have signed up in droves.
For example, technology giants PayPal, Apple, Microsoft and Amazon.com, are all leaders in their respective fields. I’d much rather own these stocks in a portfolio than cryptocurrency.
The most prominent reason why I’m not rushing to buy is uncertainty. The total market capitalisation of Bitcoin is nearly $300bn, but I can’t really work out what that means. It’s the total value of all Bitcoin in circulation, although as the cryptocurrency does not produce any cash flow or have any physical presence at all, I’m not really sure what I would achieve owning one
Indeed, the Bitcoin price is only really worth as much as other investors are willing to pay for it. As such, if the market for the cryptocurrency were to suddenly disappear, its worth would likely drop to zero as there would be no way of telling how much others would be willing to pay.
In summary, I see BTC purely as a speculative asset with no fundamentals to support it, other than scarcity and mania-driven demand…Finally, if I owned any BTC today, I’d sell, sell, sell before this monstrous bubble bursts!
Late to the Bitcoin Party, but Welcome Nonetheless
As we can see, The Motley Fool gang have been having a dig at Bitcoin right up until just a few weeks ago, all the while watching it go from $5,000 to $25,000 to $40,000 and saying they wouldn’t buy. Now, at $50,000, they decide the price is right to put $5 million dollars’ worth in. we can’t pretend it makes sense, and they may have been, like Elon Musk, late to the party, but they’re welcome all the same.