Bitcoin: Here Are My Concerns

Summary

• I'm not concerned Bitcoin is "crashing" once again.

• I am concerned about Tether's lack of transparency and some indications that it might be used to prop up the price of Bitcoin.

• Availability on Robinhood and Square is a plus for the currency, allowing more everyday Americans easy access to cryptocurrencies.

Not a Concern: Bitcoin Is "Crashing"

Bitcoin (COIN, OTCQX:GBTC) is, was, and will continue to be volatile. As of this writing, Bitcoin is down over 55% from its peak. That seems like a lot. It is also at its lowest point since late November (Thanksgiving for Americans). That doesn't seem near as worrisome - giving back three months of gains doesn't sound like a lot, for those of us who didn't purchase during those three months. I don't mean to belittle anyone's losses (or gain), but Bitcoin is volatile.

As always, Bitcoin isn't an "investment" in the Seth Klarman sense: It does not produce cash flows like earnings or dividends. Its value is instead based solely on consumer/speculator/investor sentiment. That sentiment can move with the wind. This means that Bitcoin prices can, and will, continue to fluctuate, sometimes wildly.

For believers in cryptocurrencies - whether or not you own any - the price changes should not be the focus. Cryptos will ultimately succeed or fail based on the technology, not whether one Bitcoin is worth $5, 10, or $20 thousand today. In the long run, today's price is inconsequential to the success or failure of Bitcoin.

So yes, cryptos are down across the board. But that isn't something that concerns me. Volatility comes with the territory.

More Imminent Concern: Tether
A much more serious concern to me is Tether.

website (https://seekingalpha.com/article/4142799-bitcoin-concerns)