New York, NY — Bitcoin rose to another record close today on strong demand from speculators and “investors” alike.

The cryptocurrency, founded in 2009, has risen over 1,000% in the past year, and 1,000,000% since January 2011.

Physicians and other speculators are tracking and trading the cryptocurrencies on their phones and computers, whether it be in the operating room or in between clinic patients.

“I have no idea what a blockchain is, but what I do know is that when I buy bitcoin, I make money,” said Dr. Harvey Diamond.

No, this is not where you mine bitcoin.

To the chagrin of economists and financial bloggers, bitcoin mania has hit fever pitch.

Trading in bitcoin goes against every rule of their financial book. Many economists and other financial commentators are calling bitcoin a bubble, waiting to bask in their “told you so” moment when the bubble bursts.

Of course, Bitcoin has humbled financial bloggers and economists since at least 2011:

Bitcoin has since roared back from its previous bubble pops, and the usual suspects are lining up again to call the next bubble:

The meteroic rise in the cryptocurrency comes just in time for company holiday party season, when no doubt many physicians and other high-income professionals will brag about how early they got on the bitcoin bandwagon.

“I bought 0.1 bitcoins back when it was $500 last year. I should have bought more.” said Dr. David Gold.

Like most bubbles, the financial media has struggled to coin a storyline as to why bitcoin keeps on rising each day. The current storyline is that bitcoin will soon begin trading on mainstream exchanges.

But really, its speculators operating on the greater fool theory: even if they think bitcoin is overvalued, they believe that they will be able to sell it to someone else at a higher price.

“Everyone tells me to buy low and sell high, but for bitcoin, its buy high and sell higher.” said Dr. John Silver, who, not surprisingly, is long bitcoin.

Even Bogleheads, the index fund investing forum that generally eschews alternative investments such as currencies, is all abuzz about bitcoin. Diving into bitcoin at this point, of course, would violate one of John Bogle’s core principles to “stay the course“.

Bitcoin’s rise follows a similar pattern to bubbles of the past — Internet stocks in 1999, Japanese stocks in the 1980s, gold in the 1970s, U.S. stocks in the 1920s, and tulips in the 1600s.

“Be fearful when others are greedy, and be greedy when others are fearful.” Warren Buffett famously said. No one can argue that bitcoin investors are very, very greedy right now.

“But don’t think that you can make money shorting the cryptocurrency,” said Wall Street Physician, a former trader and current physician. “No one know where the top will be.  Markets can remain irrational far longer than you can remain solvent. If you short the currency at $10,000, and bitcoin tops out at $100,000, then you’ll have been run over by the bitcoin steamroller. Stay on the bitcoin sidelines.

Stay far away from the steamroller.

What do you think? Do you own any bitcoin? Then gloat about it in the comments below! Are we in a bitcoin bubble? Make your prediction in the comments below, and come back in a year to see if your prediction came true.


  1. We are in a bubble and I own no bitcoin. The telling issue is bitcoin itself is not increasing in usage as a currency, just as an investment (I use the term loosely). As such inherently the value is not going up. Eventually it will revert to the mean taking peoples money with it. That doesn’t mean I don’t think the block chain is revolutionary, I do, it does mean though that bitcoin is just one of thousands of block chain applications. Other then brand name there is nothing that makes it special over the other ones. And thus nothing that says tomorrow it might be a competitor instead. It’s not like a bitcoin consortium owns blockchain IP.

  2. I don’t own any Bitcoin, and I do think that we’re in a bubble. Granted I don’t much about crytocurrency or blockchains. I think it’s all speculation at this point and people are getting caught up in the herd mentality. Reminds me of a brief conversation I had with someone a few weeks ago. We were casually talking about investing. They brought up Bitcoin, and I said I don’t personally invest in it and that I mainly purchase index funds. They were like “index fund?” I said year, it’s kind of like a mutual fund. And they said “mutual fund?”

  3. WSP- Do you have have the discipline to be 100% index, long, and boring? I really do believe that’s the way to go, but I can’t help but think 5% or less is worth the entertainment and educational value.
    I bought a few pizzas worth of bitcoin.

    • I assure you that in my younger days, I would have been on the Bitcoin bandwagon. Clearly, a few pizzas worth of Bitcoin is money you can afford to lose, but it’s easy to let your play account escalate into more than 5% of your portfolio if you are not careful.

  4. Bitcoin is one of those things where you know it’s going to end badly, but you just don’t know where it will end. For all you know, it can go to $50k before crashing 95%. There are no fundamentas – the only “fundamental” is that it’s used for money laundering

  5. I do not invest in anything I do not understand. The concept of Bitcoin is just something I can wrap my head around. Had the same Warren Buffett quote going through my head too.

  6. I bought some – well, a fraction of a bitcoin, and another very interesting looking cryprocurrency in the summer. Not to make money – just to learn by doing it. The blockchain tech is relevant to the industry I work in and I just could not wrap my head around it. So I stuck £40 into both currencies and worked it out, following the stories of the forks in the Blockchain (coinciding the the spike – very interesting) and the subsequent crazy value jump. It’s gone up a hell of a lot in percentage terms since (Bitcoin 400% increase – now worth £160 ish, and the other currency has gone up from £40 to £75). So yes, insane increases – but I’ll sit as happily and watch the bubble burst. Well, unless my £40 becomes £10,000(!). I’m in because it’s interesting.

    I don’t think Bitcoin is the future – but I think distributed currencies, based on Blockchain or similar technology – absolutely *are *part of the future. I see a lot of people saying that’ it’s a bubble, and they don’t understand it, and you shouldn’t invest. Not understanding something should really just be a reason to get in and try to learn for me. But yes, as an investment, it’s insane, and Bitcoin certainly looks like a bubble – its intrinsic value is decreasing and people are simply using it as a store of value – a pretty sure mark of a bubble. But there are many currencies launching now; some being used by major, well-established firms for a range of purposes. I would urge against writing off cryptocurrencies as pointless just because Bitcoin is going crazy. The internet bubble in the early 2000s was a bubble – but now the internet is bigger than anyone ever imagined then.

    This Radiolab is a great listen re cryptocurrencies – totally fascinating, and the reason I decided to learn more


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