Bitcoinâs price surged past $63,000 and then receded just a bit under on Wednesday, reaching a level the crypto coin hasnât seen since November 2021. While it still has a little way to climb to reach an all-time high of $68,000, that level feels comfortably within reach. And if youâre feeling uneasy about the rally, given what happened two years ago, youâre not alone.
Coinbase users reported a mass outage Wednesday morning, with some even complaining on social media their account balances currently read zero. CEO Brian Armstrong tweeted the company is âdealing with a LARGE surge of traffic,â almost certainly a product of Bitcoinâs surge to near all-time highs.
Whatâs causing Bitcoinâs dramatic climb? The consensus seems to be itâs all FOMO, or the fear of missing out.
âWeâve been talking FOMO rally for a while now. And people just looking for places to potentially earn money and maybe earn money quick,â Yahoo Finance reporter Josh Schafer explained during a segment Wednesday morning.
But others insist thereâs something else happening here. The true believers in Bitcoin are ecstatic, as they see the crypto coinâs climb as evidence they were right all along about âthe fundamentals.â Prominent X accounts sharing video clips of CNBCâs Joe Kernen calling Bitcoin a âstore of value,â the theory that the cryptocurrency retains its worth and doesnât depreciate.
âżđ„đđđđđĄđ: CNBC news reporter for 30 years, @JoeSquawk says, âBitcoin is a store of valueâ
— Documenting âżitcoin đ (@DocumentingBTC) February 28, 2024
The hype on Wednesday even reached into religious territory, as Bitcoin fans celebrated Michael Saylor, the CEO of Microstrategy and a longtime believer in Bitcoin as the currency of the future.
â2029, Michael Saylor is the richest man in human history,â one X account wrote. âPeople gather in churches to chant âthere is no second bestâ and listen to the hum of Bitcoin miners as they are fed tiny sacramental extra slices of pizza.â
Microstrategy currently holds roughly $10 billion of bitcoin, according to Fortune magazine.
To be clear, bitcoin is no more useful or stable today as a currency than it was back in 2022, when FTX collapsed and investors immediately lost billions. The âfundamentalsâ are all the same, which is to say very few people are using Bitcoin as a currency to buy goods and services. Well, almost nobody. The U.S. Treasury Department recently released a report noting that Bitcoin is the cryptocurrency of choice for human traffickers and child abusers.
The simple fact that investors lost $2 trillion between November 2021 and November 2022 should give people pause before they start dumping money into crypto again. But that wonât stop people from trying to time the market.
Thatâs why itâs called FOMO. People see the rising price of bitcoin and want to get in because they want to make money. What they donât knowâor know and canât fully appreciate because humans are often irrational actorsâis that the big players in crypto got in six months ago and are ready to sell, leaving retail investors holding the bag.
Peter Thielâs Founders Fund reportedly bought $200 million worth of crypto beginning in the summer of 2023, according to Reuters, a fact we only learned about a couple of weeks ago. That means Founders Fund probably bought Bitcoin at a price of roughly $25,000, less than half what it is today.
If history is any guide, many retail investors are about to FOMO themselves into a lot of financial pain and heartache. Youâre free to invest your money however you like, but itâs probably wise to only invest money youâre willing to lose. Youâd think humanity learned its lesson in 2022, but it really does seem like weâll just keep riding this Bitcoin rollercoaster for decades to come.