Bitcoin mania is in full force.
When I get to my desk in the morning, the first thing I do is check the latest gold news. But lately, when I google the word "gold," I mostly get Bitcoin news. In his most recent podcast, Peter Schiff even suggested CNBC should rename its network the "Crypto News Bitcoin Network."
Many analysts have suggested Bitcoin is replacing gold. In fact, an article on CoinTelegraph reported that some investors are actually dumping their yellow metal in favor of Bitcoin. During a recent interview on CNBC. RJO Futures' Phillip Streible declared that "Bitcoin has stolen a large market share of gold." There is at least some anecdotal evidence backing this up.
Larry McDonald of The Bear Traps Report explained that generally gold goes up when bond rates fall. But in recent weeks, the yields on bonds have decreased, and gold has simultaneously dropped by about 2% - an event that is quite rare. He said he thinks this breakdown in trends has something to do with Bitcoin.
And it probably does.
There is little doubt in my mind that Bitcoin is in a bubble. I'm not saying it has no value. I'm not saying it's going away. I'm not even saying it's going to lose most of its gains at some point. I'm just saying that there are an awful lot of people getting into the cryptocurrency game that know nothing about it other than they hope it will make them rich. There was even a CNBC report about people taking out mortgages to buy Bitcoin. This is undeniable bubble-behavior. And to me, that signals a great deal of risk in the market.
Peter Schiff went further, saying this is the most irrational bubble he's ever seen.
I think there is less of a
