Volatility breeds attention, which breeds more volatility. Eventually positive feedback loops are exhausted of fuel and they settle back down. Every day now there is a new tidbit of news surrounding bitcoin that causes either panic buying or panic selling. This is merely a consequence of bitcoin being very young and suddenly making it mainstream, much like a new and young rockstar or sports star catapults to international fame overnight. He’s liable to do some very volatile and dangerous things when he first realizes that he is suddenly famous.

We can second-guess ourselves every day and try to day-trade bitcoin. Maybe on some days we’ll win a lot of money. But then we’ll be tempted to try it again and eventually we’ll end up losing it all. That’s day trading. It can be fun and exhilarating, or absolutely devastating and make you want to jump off a skyscraper. It can make you look like an absolute genius or a complete idiot, sometimes on the very same day.

We see a piece of news, maybe about Jamie Dimon, maybe about China, maybe about something else, and we see a bitcoin price reaction, and then we weave these narratives in our heads about why bitcoin reacted to whatever piece of news it was. Then we convince ourselves that these narratives are so correct that we trade based upon the theories we concoct on our heads.

We’ll get to the latest news in a second, but before we talk about the latest cryptocurrency intrigue, it is important to keep the long game in mind. Governments are printing more and more money in order to avoid paying their debts, but one day soon those debts are going to be called in and fiat currencies and government bonds the world over will collapse. If bitcoin survives until that day (I believe it will), then it will climb to heights that seem inconceivable now (along with gold and other hard assets). That’s the long game, and that is the main fundamental reason to own bitcoin at all. With the US debt ceiling now gone, we may be in the final parabolic stages of government debt accumulation before the global pyramid scheme collapses.