Is Bitcoin the worst USD investment of 2014?

by Chris Becker

On a nominal basis alone, Bitcoin has been the worst investment in USD form for the calendar year, as this chart from Quartz shows:

bitcoin

 

Here’s the crypto currencies decline in chart form for the last couple of years and to provide context:

bitcoin2

 

 

Of course the worst real currency (philosophical debate aside on what is real money or no) has been the Russian Ruble, which has rallied after the huge spike in interest rates by the RCB last night.

The real question is what current investment in USD will be the worst next year? Shale gas junk bonds? Venezualen Bolivar? Or Yen?

Or Australian property in fixed Yuan?

Investing is less about finding winners and more about cutting losses – i.e risk management. The advantage individual investors have over governments and central authorities is their ability to be nimble and stop backing the dead horse.

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Comments

    • “I thought Bitcoin was supposed to take over the world?”

      I’ve never thought of Bitcoin as an investment vehicle (though I sure wish I’d bought a lot more at $10 and then $50) but it is absolutely unsurpassed as a transactional tool.

      Who knows whether Bitcoin will be The One or even survive, but cryptocurrencies and the applications that they support are here to stay.

  1. I guess it depends on your point of view. As certain colleagues of mine have pointed out if you want to purchase certain items and have it delivered to your front door and not have a monetary trail to follow in doing so then you might regard bit coins to be a great investment.

  2. I guess residential property investment in Sydney and Auckland are the perennial favorites on the flip side.

  3. As a technical chart it looks like an amazing spike followed by a clear downwards trend that is levelling out. No typical trend ending marker yet, but also no evidence of explosive downwards movement. There are regular attempts to get it accepted in standard environments and it is hard to beat for online trades. The problem with online exchanges collapsing, however, really is an obstacle that has not been overcome properly. As a product that does not inflate but has some properties of “real” money like Gold, it has the investment potential of any commodity that pays no interest.

    • Needing to call something real does not make it so.

      Its as bad as saying “I’m talking about real people” e.g. people like us thingy…

      • You might be right Skippy. But then, Tanmedia is talking about “Real” estate. I suspect that Sydney property as measured in USD will have a somewhat similar chart pattern next year. I’m concerned when the only good strategy I can come up with is shorting the AUD.

      • It does not matter what is inferred wrt the term real nor does it inform to swap asset weights, as optics, when forming judgements.

        Its all hyper short term. Do theses value judgements inform one to the human input or blind.