Weekly Thoughts 08 December 2017

The whole Bitcoin thing. Maybe I should comment, although I only have two cents worth here. And therein lies part of the whole problem in my mind. Two cents will always be two cents. It was two cents 30 years ago and will still be two cents in 10 years time. It might buy you less, sure. But it is still a Two Cents.

If Bitcoin is or was to be a currency, in my mind, and that of many commentators, is that it should be of a stable value per unit. But it behaves like Gold here, in terms of being speculative in value, all the while not being able to do anything for you, in that it cannot give you income.

Back in October, when listening to three Allan Gray analysts at a presentation, one of them made some interesting points over Bitcoin and cryptocurrencies. He said the fact that as yet there was no limit to issuance, was a problem. He went on to talk about why metals were a form of wealth storage. He said the limited supply was a factor and hence for thousands of years a store of wealth, even though less these days. Then he spoke of looking at the periodic table. Now for me he was referring to a swear word in my educational life way back when you had to be home to get a phone call and music came out on singles in the CNA.

He said that there are 112 elements on the periodic table. I have to believe him. He said 10 are gases at room temp, making them not good for investing. Then 38 are radioactive – again not good for investing. But only six are metals, like platinum, gold, silver, copper. Again, I have to believe him. The limited supply creating a value. Interesting, I thought.

Not sure I’m offering an opinion to the topic. I don’t think that’s my intention. Just some thoughts.