Bitcoin Hits $10,000 – is This the Beginning or the End?

“Be fearful when others are greedy and be greedy when others are fearful.” - Warren Buffet

Bitcoin continues to defy gravity and has just hit the $10,000 mark across several major exchanges. Korean exchanges transacted at this price in the early hours of the morning (Europe) yesterday due to higher demand in the region.

Trading volumes are relatively high as of now, with a significant discrepancy between prices on Korean and European/US exchanges. The further west we go, the lower the price, as Korean Bithumb quotes at almost $12,000, while US-based Kraken quotes at $10,000 as of writing. At the same time, we have $10,500 on, $10,350 on Bitstamp and $10,400 at Coinbase.

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Trading volumes appear to be near the highest since the SegWit2x debacle earlier this month. Bitcoin has soared about 85 percent since the recent bottom at about $5800 was set on the 12th of November. The price is rising exponentially, and the amount of mainstream media commentary on Bitcoin and new crypto enthusiasts every day prompts more questions than answers

What’s Next?

Now that we have hit this first significant mark in a while (kidding), Bitcoin prices are set to continue to be volatile. Will the $10,000 mark bend more skeptics to commit funds into crypto, or will it prompt a big profit-taking exercise on the part of long-term holders and miners?

Only words of wisdom from one of the major investment gurus of our time, Warren Buffet, can help (sort of): “Be fearful when others are greedy and be greedy when others are fearful.”

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The central question for crypto-investors and Bitcoin aficionados, in particular, is who is fearful and who is greedy. Our brains tend to react in unpredictable ways when we are faced with a choice that involves money. This is only natural, since having money theoretically presents us with more time commit to other, sometimes more pleasurable activities than making money.

It is up to you to determine whether the Bitcoin market is at an ‘extreme fear’ level or an ‘extreme greed’ one. I am sure that you have your own ways to assess how excited the public is about Bitcoin, but I am also sure that your parents, and maybe even grandparents know about it. The central question is not how many people know about it, but how many people own it.

Exchanges, CFD brokers and wallet providers have had a great run with crypto trading/investing up until now. If history is any guide, they will continue to enjoy the wealth benefits that financial intermediaries tend to receive as a given asset class becomes popular. Remember those millionaire real estate agents in 2008?

Financial Freedom and/or Just Another Investment Boom/Bust?

As experienced investors know, the way from riches to rags is a short one (and this is why I am writing these words, instead of chilling on a yacht in the Caribbean). Predictions that we hear these days about Bitcoin going to $40,000 (from Mike Novogratz who claimed a week ago that it’s going to $10,000 before the end of the year, when it was $8,000) to $80,000 (from Peter Schiff who said that if it goes to $8,000 it can go to $80,000) are countless. But who owns the majority of the currency?

The answer is that we don’t know (but the Chinese miners sure are deep into it). Without me trying to give any investment advice, now that we are at $10,000, do carefully consider how much risk do you want to carry forward into next year.

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