Henry Blodget’s horrible Bitcoin advice
For weeks, anyone with a modicum of experience in financial markets has been watching the incredible upward spike in the value of Bitcoin -- the virtual currency beloved of libertarian haters of big government -- and warning that the bubble was sure to pop.
On Wednesday, their predictions seemed to be at least partially coming true. After reaching a high of $266, the value of a single Bitcoin started dropping quickly, provoking a drastic sell-off. At one point, as reported by MtGox, the leading exchange clearinghouse for Bitcoins, the price dropped as low as $126. Trading has been absurdly volatile, however, with huge swings back and forth all afternoon. (When I started writing this post, the price was back up to $180. We'll see where it is when I finish.)
The timing of the turbulence couldn't be better. On Tuesday, Business Insider CEO (and disgraced stock analyst) Henry Blodget published a screed mocking people who were calling it a bubble. He backed up his analysis with some superficially compelling math: If Bitcoin crashed before you got out, you only stood to lose "100 percent" of your initial investment. But your possible gains could be far far higher....