Bitcoin Price Spiral-up 10% after Front Page of Wall Street Journal

Didn’t it shock your fancy yesterday to find about that Bitcoin starts the March at the very top of the Wall Street Journal with a banner ad for their feature article? (I’ll assume for the sake of argument that you read the daily bible of the financial world as religiously as it is printed.) Wasn’t it also spurring to find that Bitcoin’s price, as generally irrelevant as it is, rose a solid 10% over the course of Monday? Coincidence? I think not.

Bitcoin Price spirals-up at the Monday

Bitcoin price was heading back downward all weekend long and dropped to $245 on Sunday, after several days above $250. Then, the deliveries of the WSJ morning edition start hitting the street, and it’s fortunes turn right around, peaking at over $270. Did many investors have buy orders on BTC at $250, and they started getting pulled first thing Monday morning? Sure. Does that explain its passing $270 on Monday night? No. So I’ll happily give WSJ the credit for its bull run. Not the first time the media has influenced a commodity price, and it won’t be the last. Maybe they’ll cut it down in April, and BTC will have to give back the gains? Won’t be the first time for that either.
Here are some of the highlights, starting with Mr. Harvey:

“True, bitcoin isn’t backed by any central authority. But that doesn’t matter. Bitcoin exists because users assign value to it. To say it violates the rules of finance because it lacks a central issuer is problematic on many levels. Governments don’t “guarantee” stability of their currencies—look at the ruble and Swiss franc. Similarly, the fair price of a Bitcoin, as measured by the discounted value of future cash flows, may be zero. But the same is true of fiat currencies, including the euro and U.S. dollar. No commodity underpins the value of a euro or dollar. You tend to lose money when you hold cash. This doesn’t deter people from holding cash.”

And Mr. Tymoigne had this to say about the digital currency:

“Bitcoins pose a huge liquidity risk. Ultimately, anyone with bitcoins has to convert them into a national unit of account—dollars, say, or euros—to pay taxes or personal debts and to make other transactions. Their extreme volatility makes them a bad bet if one plans to buy a house in a few years, is saving for college or has regular payments on, say, a mortgage or car. If bitcoins were a large asset in a portfolio, the investor’s solvency would be at risk. This certainly would be the case if bitcoins were promoted for poorer individuals who don’t have access to banking today.”