Bitcoin to Infinity?

by Kerry Lutz
Financial Survival Network

We confess to being Bitcoin skeptics. We had an opportunity to get in on the ground floor when the digital alternative currency was trading at just $7 per Bitcoin, but didn’t bite. Today, the exchange rate hit $400. Trading Bitcoin is not for the faint of heart. Daily fluctuations of 25% or more are not uncommon. Our friend Trace Mayer is a big believer and sees it as the currency of the future.

For those not in the know, the currency is open source, the number of units issued is fixed and those who hold it are annonymous. Many misconceptions about it continue, which is hampering its adoption. Governments are extremely hostile to its acceptance as money, no surprise there. It’s not like you expect the Federal Reserve to welcome alternative currencies with open arms.

Bix Weir, a frequent guest on FSN, believes that the primary reason Bitcoin is enjoying its bubble-like status is because of the constant manipulation and control of gold and silver prices. Whatever the cause, the Chinese are now getting into the Bitcoin market, so you can expect more wild gyrations and volatility ahead.

We’re still cautious about Bitcoin’s future, but the same can be said about any currency. The world must once again figure out that for a currency to function properly, it must be a store of value; in other words money. Unfortunately, such lessons only get learned the hard way. An unbacked currency can never be worth the paper it’s not printed on.

Kerry Lutz

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