Why Is Everyone Rushing to Buy Bitcoin?

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Near the top of every market, as distrust in institutions rises, speculators rush to something they consider safe and profitable, something that lets them capitalize on the fear. In some markets, it’s been the dollar. In others, it has been gold. In this market, it’s Bitcoin and other cryptocurrencies, or alt-coins.

The bugs I have harped on previously — the lack of control, the sharks in the water — are features to the Bitcoin bulls. They don’t see the market in encryption keys as a trade about nothing. They see it as a hedge against governments and banks that they’re certain will protect themselves first, and investors never.

So rather than sell last month’s fork of Bitcoin into Bitcoin and Bitcoin Cash, speculators bought it. In doing this, they raised the value of the Bitcoin market to $55 billion, from about $40 billion, and those who also got Bitcoin Cash, which is down 20% since its opening, have another $5 billion in their wallets.

This has the speculators believing Bitcoin can rise from its present price of about $3,500 per coin to $5,000, and for at least one who compares Bitcoin to Moore’s Law, $100,000 by 2021. This is happening despite Bitcoin trading being a true Wild West.

I have already described how some of the largest Bitcoin markets were stealing from customers. The largest even refused to credit customers with the fork, like a brokerage refusing to pass on a company’s dividends, until just this week.

Now one of the other large Bitcoin traders, Bitfinix, has been accused of spoofing, disrupting the market with phony orders. That’s illegal under the Dodd-Frank law, but in the Bitcoin world it may not even be unethical.

If you don’t trust the coins, or the traders, there is a stock you can buy that will give you a piece of the action. It’s Overstock.com, Inc. (NASDAQ:OSTK)

Once upon a time, in a galaxy far, far away, Overstock was seen, and saw itself, as a rival to Amazon.com, Inc. (NASDAQ:AMZN). But put it this way: If you put $100 in OSTK a decade ago, you have $90. With Amazon, you have $1,200.

Be that as it may, Overstock is now making a play for the cryptocurrency market. It is now accepting over 40 alt-coins, or cryptocurrencies, on merchandise sales, making them legal tender in its marketplace through an interface called Shapeshift. More important, it says it will keep half that “money” as an investment.

CEO Patrick Byrne has been an advocate for years. The company has a blockchain and Bitcoin trading unit called Medici Ventures. He calls Bitcoin “pro-freedom.” Overstock stock is up almost 25% from its early May low of $14.15, and traded on Aug. 10 at $18.10 per share.

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