Bitcoin has gone parabolic. Again. We’re now at $1,736. By the time I finish writing this we may be passed $1,800. This time though the parabola is not as extreme as 2013, at least not yet. If the 2013 bitcoin craze were to repeat itself, we could see a top at (take a breath) $8,634. Get much higher than that and a penny becomes smaller than the quantum Planck Length in bitcoin terms. The universe might buckle at that point. It’ll be like when Antman went subatomic.

Last time it took 56 days for the parabola to top, so again if we see something similar to what happened in 2013, that level could, at least theoretically, be reached in just 10 days by May 19th, and then crash down to $1,000 by next year.

That’s if everything repeats itself exactly. Will that happen? Almost certainly not. Market history does not repeat itself in such easily predictable patterns. The point is though that once you go parabolic, almost anything can happen, so long as at makes no sense. Trying to pick the top of a parabola is not an investment. It’s a dangerous game, filled with novices with little capital high on get-rich-quick fantasies and easily spooked if a trade goes against them even briefly. Much like real estate flippers in 2006, silver in 2011, tulip hoarders in 1637, or dot com buyers in 2000.

This is not to say that there are no fundamentals behind this drive higher – there are, but they’re just lagging behind the move. Here’s what I believe is influencing the current spike, or at least the beginning of it, though it’s unclear to what degree. Below is the BTCChina exchange going back to mid 2015. Notice the very big and obvious volume explosion from October 2016 through January 2017. Something happened in China between October and January. Someone, or a group of people, moved a lot of money. During that time bitcoin went up in yuan terms from 4,111 to 8,896, and then crashed back down to 4,893 when the volume spike tapered off.