Ben Carlson, Columnist

Bitcoin, Stocks and the Fear of Missing Out

Seeing gains on top of gains increases investor confidence that those gains will last.

May 31, 2017 at 6:00 AM UTC

Ben Carlson is director of institutional asset management at Ritholtz Wealth Management. He is the author of "Organizational Alpha: How to Add Value in Institutional Asset Management."

On the up and up.
Photographer: Chris Ratcliffe/Bloomberg

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Bitcoin has been on an unbelievable run. The cryptocurrency is up around 124 percent for 2017. And that’s after it gained 125 percent in 2016. In May alone, it’s up more than 60 percent. It’s hard to know what the long-term impact or performance will be, but one thing’s for sure -- investors are swept up in cryptocurrency mania.

One simple theory for Bitcoin’s vertiginous rise in recent weeks is that it’s turning into something of a self-fulfilling prophecy. Momentum begets momentum and buying begets buying when gains begin to come hard and fast.