Kass: Bitcoin is a mirage

* In my 15 surprises for 2018 I predicted that the bitcoin would rise to $ 21,000 (it has exceeded $ 20,000) and will close the year at $ 2,000

* This morning, Bitcoin is trading at $ 4,400

* Pay attention to bright investment objects, fashions and experts who trustfully deliver and tread investment.

"So the candle sang the moath."
– William Shakespeare

Surprise n. 4: the Bubble Pops cryptocurrency

By means of background and as previously discussed in my diary, bitcoin is a cryptocurrency released as open source in 2009. Bitcoin is a carrier tool that provides a peer-to-peer exchange, allowing users to exchange bitcoins anonymously based on a blockchain of public trust ledger that is not based on a trusted third party. I recently wrote several columns on bitcoins:

* Woodstock or Bitcoin?

* Boca Biff does Bitcoin

* Because Bitcoin is En Fuego and where it could go from here

My surprise is that although the bitcoin becomes increasingly popular in the short term and rises to more than $ 21,000, the price falls below $ 2000 in 2018.

The publication of this surprise – that bitcoin will collapse in price in 2018 – will result in growing public criticism on Twitter and elsewhere by bitcoin devotees in the coming weeks against me. My name is "no coiner", a term that is given to unbelievers bitcoins like me. "No tokens" are defined as people who have lost the price of bitcoin and have become skeptical and bitter and say it is only a matter of time before the price collapses because it is a collective illusion.

At the beginning of 2018 the popularity of cryptocurrencies like the bitcoin crests. Bitcoin ATMs have even become common in Boca Raton, Florida, reminding us of the historic relationship between that city and past frauds and patterns. (Boca Raton has been home to so many fraudulent schemes – currency exchange schemes, rare currency swindles and the sale of timeshares to fictitious holiday homes. Commission President Securities and Exchange Commission Richard Breeden said that Boca Raton is " the only coastal city "in Florida where there are more sharks on land than in water.")

My surprise is that bitcoin trades above my target of $ 21,119 at the start of January but crashes in 2018 to less than $ 2,000 and falls towards and at the end under the cost of mining the cryptocurrency, which today is about $ 1,000 to $ 1,500.

The initial break and the sizable lower rupture in the price of bitcoin is when market participants begin to realize more fully that the offer of cryptocurrencies, on the whole, is unlimited with low access barriers. The threat and realization of this risk is promoted by Apple Inc. (AAPL) and Amazon.com Inc. (AMZN), which introduce their own easy-to-use and faster cryptocurrency blockchains. (Note: Amazon has already received a patent for its blockchain technology – 8.719.131 – see here and here.)

JPMorgan Chase & Co. (JPM) causes a stir after previous negative comments by CEO Jamie Dimon on bitcoin introducing "JPMorgan E-cash", its cryptocurrency. Shortly thereafter, other banks follow the example. In addition, several governments (including the United States) introduce their own government-based cryptocurrencies based on their desire to continue to control political levers such as money supply and fiscal policy.

The eventual death of bitcoin begins in earnest when it is revealed in a New York Times that they expose that less than 10 entities, for the most part residing in China and Japan, have manipulated the price of the higher bitcoins in pattern fashion Ponzi in the last two years. The cryptocurrency bubble eventually collapses dramatically and falls in value by 90% as a result of direct government intervention and successful hacking in which thieves penetrate the blockchain code and steal a large amount of coins.

Several large hedge funds, desperate for "alpha", are caught with their trousers and wallets and with a great weighting in bitcoins and other cryptocurrencies; they lose more than 30% of their assets and the value of their funds and are forced to liquidate their holdings in cryptocurrency and close their funds.

Bitcoin will eventually take a permanent place in the Speculative Hall of Fame, along with tulips (1636-37), dot.com (1999-2000), the housing bubble (2005-07) and South Sea Bubble (1711-20) while traders and investors learn the lesson, once again, that a business class founded on the idea that there is a bigger fool who will be willing to buy that good for more than the previous paid madman, almost always ends in disaster.

The year 2018 will be one in which investors come to understand that blockchain technology – a distributed database of transaction records that are executed and shared between the participating parties and are validated by a network of users, called "miners", that contribute to the power of calculation in exchange for the possibility of earning coins using a shared database and distributed processing – is real (every transaction is encrypted and can not be replicated or altered), but that bitcoin is a mirage and becomes, like many previous schemes, a synonym for Ponzi's nostalgia.

– 15 surprises for 2018

Bottom line

* Be careful to chase shiny objects

I'll deliver mine within two weeks 15 surprises for 2019.

One of my surprises in 2018 was that the price of the bitcoin would rise to $ 21,000 and then fall below $ 2000.

The absence of regulatory supervision, the lack of fiscal authority (money laundering is common), the unlimited supply of new cryptocurrencies and the lack of security (seen in the regularity of hacks) have constituted some of my motivations for a negative view of bitcoin and most of the crypto currencies.

With bitcoin now trading at $ 4,395, I consider it ... "Mission accomplished."

As I wrote, pay attention to shiny investment objects.

Frankly, I am shocked that many venture capitalists, innovators and other reasonably intelligent professional investors have been tricked into the crypt space.

Bitcoin is a mirage and is going to become, like many previous schemes, a synonym for Ponzi-like nostalgia.

(This comment originally appeared on Real Money Pro at 8:46 am on November 20. Click here to learn about this dynamic market information service for active merchants and to receive Doug Kass's daily diary and Paul Price columns, Bret Jensen and others.)