Headlines on MarketWatch this evening:

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What are the signs I see?

• Meteoric increase in value without a great explanation for what's driving it
• Crazy predictions: I remember Dow 40,000 predictions at the peak of insanity around 2000. Well, now we have Bitcoin 40,000!
• Sober and experienced market observers saying "stay away." 
• Mushrooming number of funds to invest in the asset class of cryptocurrencies (which may actually keep the bubble inflating as they bid up the assets)

I don't pretend to have any keen insights into bitcoin or other cryptocurrencies; I am merely observing the feeding frenzy and the psychology that accompanies a phenomenon like bitcoin. As for the $40,000 prediction, let's revisit it in 12 months. Get your students to have a stake in this and make a prediction of where it will be in one month. 

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Want to learn more about bitcoin? We created a basic primer to help you answer your students' questions about it. 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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