This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher speaking with Henry Blodget, co-founder and CEO of Insider, Inc., and a former top-ranked Internet stock analyst.
Blodget was pitched an investment in Bitcoin (BTC-USD) all the way back in 2011 (price then was about $80 per coin). His conclusion then was that Bitcoin was the perfect asset for a speculative bubble - finite supply, complicated, hard to understand, and with price determined not by any normal valuation metric, but instead completely by supply and demand. Thus, you’ve got downside of “only” 100%, and an upside not limited to any valuation benchmark - $100K per coin, $1M per coin, $10M per coin? Why not?
One thing that’s changed since 2011 … Back then, Bitcoin’s backers talked about it as a new type of money or currency. No one really makes that argument anymore. Instead bulls talk about a store-of-value, or a better gold. So don’t expect Bitcoin to disappear, says Blodget. Like gold, it will have its believers for a very long time. But also like gold for very long periods, an investment in Bitcoin may prove to be a dud.
Blodget came to some level of notoriety during the dot-com bubble, and he’s seeing some similarities now. In particular, the rolling speculative bubbles of the past year are looking very familiar to him. Checking valuations, he suspects equity returns will be pretty lame over the next decade. However, he would advise against trying to time the peak. Harking back to the mid-late 1990s, there were any number of what appeared to be bell-ringing tops, but the bull market kept getting bigger.
There’s plenty more, including Blodget’s view of the outlook on Amazon (AMZN) today, and his thoughts on last week’s mammoth deal for AT&T to sell certain WarnerMedia assets to Discovery.
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