Friday File: Interest Rates, REITs, Bitcoin and Berkshire

Big picture thoughts about Bitcoin and REITs, plus updates on PCSB, NODK, WATT, MKL, and even a little marijuana stock...

Lots of folks have been asking me about Bitcoin and Ethereum and the other alt-currencies of late, for obvious reasons (well, it’s obvious why folks are curious about it — far less obvious why anyone would seek my wisdom on the subject)… so I’ve got an extended bit of blather about those currencies to share (if you find them completely uninteresting, or don’t care what I think, just scroll down a bit and I’ll start talking about REITs and interest rates to jazz things up).

The reason for interest is clear:  The prices of most cryptocurrencies are soaring (though coming back in a little bit here as we close the week) — the total amount of cryptocurrencies/alt currencies in existence now exceeds $80 billion in value, according to CoinMarketCap.com, up from close to zero five years ago and about $10 billion just one year ago.

Close to half of that “value” is in bitcoin itself, which is the pioneer and still by far the largest, but the other alt-currencies are growing dramatically faster and being launched seemingly every day — the “ex bitcoin” alt currency market hit one billion dollars just over a year ago, in February of 2016, and has now topped $45 billion, with much of that gain from cryptocurrencies that didn’t even exist a year ago.

My initial reaction is “that’s crazy.”

And I’ve commented on it in the past few days to a few readers who have asked, but thought I would expand on those thoughts a bit for you today.

To me, this still has all the hallmarks of a mania… particularly with all the new currencies that are surging up to compete with bitcoin and ethereum and the other larger markets, with the reason for their existence seemingly (to a non-expert here, I should admit) being “hey, here’s another one that’s cheaper and might go up!”

But just because it’s a mania, doesn’t mean I have any idea when or how it stops — or any reason to be convinced that it’s actually a bubble (the key determinant of a “bubble,” of course, is that it pops — which you can’t generally be sure will happen until it has happened). The same “that’s crazy” reaction would have been perfectly reasonable when bitcoin went from a few cents to $10, then to $100, then to $1,000, and it seemed safe to write it off for a while as it ...

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