Right on the Money: Bitcoin hits $3,000, or 1000x my entry six years ago when people called me raving mad

In 2011, I went all-in into bitcoin. As I described in a blog post at the time, I took all my savings and my entire credit line and put it into the fledgling currency, once I had realized its disruptiveness, and I did so at about $3 valuation (to simplify events a bit). People mocked me relentlessly for predicting a thousandfold increase.

I tend to be good at predicting events five years out that the large majority considers unforeseeable black swans. I’ve done so twice now for particular high-profile events: once when founding the Pirate Party – which was a “career ending decision” according to some colleagues, until I had succeeded wildly in what I had set out to do, sending people to the European Parliament on basically no budget using a novel set of leadership techniques. The other time was when I predicted the massive breakthrough of cryptocurrency in 2011, and said I predicted bitcoin to increase in value hundredfold-to-thousandfold over the next three to four years. (Do note that the actual breakthrough has not happened yet.)

Coindesk's price index breaks $3,000 in intraday high

In both these cases, people basically said I was mad, even though I made no secret of going all-in into bitcoin — I’m not the “haha, I got rich five years ago with my secret method” type of person. Rather, I announced to the entire world that I was going all in, and being very specific about my reasons, giving anybody who wanted the ability to copy my actions. (A lot of people did; I get people coming up to me today saying I got them into bitcoin with these posts. Good for us, good for all of us.)

A key to these kinds of high-risk decisions, of course, is to trust your own intelligence and judgment when you know you’re going against the grain and against common wisdom. If you try to do something halfway, it’s the equivalent of taking the average between two sidewalks and walking in the middle of the road. I quickly lost count of how many times various well-meaning people told me to “sell and collect profits and come out ahead” – but that simply wasn’t the analysis I had made. Most people didn’t even try to be well-meaning, but instead had fun at and mocked my decision to go all-in outright.

To illustrate this, this is the highest-voted comment — not a random comment, but the highest-voted comment — from the Reddit thread six years ago when I announced I was going all in. Particularly note that this is a comment made by, and voted to the top, by bitcoin enthusiasts.

“I can’t even begin to comprehend the depths of the stupidity of that kind of reasoning”. To be fair to the commenter, it took a little over five years to get there, and not my estimated three to four years.

It’s quite funny in hindsight, actually, that even the people who were most devoted to the technology expressed themselves like this at the time.

In any case, as a followup to the original post, I just wanted to highlight that it reached the target I predicted. I was, as people say, right on the money.

Or maybe I should say that bitcoin reached the first target I predicted. Today, I refrain from making predictions for bitcoin until scaling is properly resolved with good engineering, and the obstructing company Blockstream has been kicked out of the community; the currency really has no future until this event has taken place as Blockstream has negated all the utility I originally pointed out through insanely tone-deaf non-business, but cryptocurrency as a whole remains extremely disruptive, be it the first-mover variant (bitcoin) or a second-mover variant.

If you love Blockstream and/or Bitcoin Core, but started doing so after I went all-in, I would urge you to consider the rational possibility that my analysis holds water this time too.

(Oh, and the market cap total for cryptocurrency just hit a hundred billion US dollars. And it’s still just the beginning. When cryptocurrency is ready, it won’t make sense to measure it in US Dollars any longer.)