Bitcoin may be hot, but it’s not real money

Unstable and scarce, it doesn’t fit criteria

If you put $1,000 into Bitcoin in 2013, you’d have more than $23,000 now. Techies claim it’s the future. Enthusiasts are buying. Should you?

Like most investment decisions, it depends on who you are and what you want. Though it’s called “cryptocurrency,” Bitcoin is pure speculation, not money.

It sounds like fancy, techie money. Some retailers accept it as payment. Since Bitcoin is untraceable, it’s often used on the Dark Web, where unsavory types deal in unsavory things.

But money? It ain’t! Real money is exchanged for goods and services anywhere. Its value is relatively stable in the short term. It’s accepted by those who know its value largely holds up until it can be reused. Money is liquid, plentiful, stable and nationally accepted.

Bitcoin isn’t any of that. There are about 16.5 million Bitcoins worth $42 billion. America’s annual economic output exceeds $19 trillion. The world’s tops $75 trillion.

Scarcity, hope, hype and fear drive humongous price swings in Bitcoin, making it unstable. Pricing goods in Bitcoin isn’t far from pricing in volatile leveraged commodities such as pork belly or lumber futures.

A real currency? You wouldn’t hold much. Too boring, like holding cash. Some Bitcoiners favor a more money-oriented spin-off, called “Bitcoin Cash,” which will go live Aug. 1. Will it be money? Beats me. Only time will tell.

Bitcoin Cash arrives only because Bitcoin — the one everyone is so hot over — is just a speculative commodity. Like miners dig diamonds, Bitcoin miners “mine” bits from algorithms. Bitcoin gyrates like levered commodities on steroids because its “hype-o-meter” rivets off the charts.

So buy it now? Will Rogers famously said, “Buy stocks, and when they go up, sell ’em.” When asked, “What if they don’t go up? Rogers answered, “If they don’t go up, don’t buy ’em.”

Bitcoin soars but falls hard enough to hurt. This year through June 10, it soared from $959 to $2,953. By July 17, it was under $2,000. Five days later, it was back above $2,700. It’s sagging again as I write. Is it going up? Is this time to sell? I haven’t a clue.

Investing isn’t about quick riches — Bitcoin, stocks, real estate or otherwise. It’s buying growth or value and realizing that into your investment over time.