I’ve been writing about cryptocurrency for my entire career. In that time, one point I’ve always stuck to is simple: don’t listen to me for investment advice. Today, I want to quantify why.
Bitcoin was created in 2009, while I was in my first year at university. As an economics student – and massive nerd – it sat squarely at the intersection of my interests. By my final year of uni in 2011, the original cryptocurrency was experiencing its first boom and bust cycle. It rose from a low of $0.30 to a high of $32.34 that summer, before crashing back down to less than $3 when Mt. Gox, the original bitcoin exchange, was hacked. (This will become a theme.)
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That was also the year the Guardian first covered the currency, with Ruth Whippman warning: “Its critics in the political sphere fear that it could give rise to an online Wild West of gambling, prostitution and global bazaars for contraband.”
I was very much on the outside looking in, though. Not being a regular drug user (cf “massive nerd”), the mainstream use of bitcoin – getting pills or weed delivered by post from the Silk Road – passed me by, so I found it more of an intellectual curiosity than anything else.
This is perhaps in part because the first thing I remember hearing about bitcoin was a tale, probably apocryphal, of someone using their gaming PC to mine the currency in their dorm room in a heatwave. The air conditioning failed, the user reported in a forum post, and heatstroke left them with mild brain damage. You can see why I was unimpressed.
By the second major boom, I was covering economics for the New Statesman. And that’s where the trouble starts.
In my first published piece using the word “bitcoin” – the first time the New Statesman had covered the topic – I confidently declared: “This is what a bubble looks like.” At the time, bitcoin was trading at around $40 a coin.
It has never gotten that low again.
I was right that there was a bubble in the offing: the price of bitcoin had doubled in two months, and would double twice more before it popped less than a month later. But the crash, which would have been huge for any other normal asset, was a reduction of around half, taking bitcoin to the lows of … three weeks prior.
A decade on, the memory of this bold claim still haunts me, and I refuse to make predictions about the future of any cryptocurrency. In fact, I’ve taken to joking that the best way to make money, historically, is to do the opposite of what I say.
So I put it to the test.
The Alex Hern bitcoin investment strategy
Obviously, I don’t give actual investment advice. So I reviewed every article I’ve ever written that mentions “bitcoin”, and sorted them based on whether or not a reader would think they were good news for the crypto, or bad news. There’s an element of value judgment to this, of course: you might disagree with my decision that a story about the Winklevii launching …….
Source: https://www.theguardian.com/technology/2022/aug/03/techscape-bitcoin-cryptocurrency-predictions