We all know the old investment warning that past performance is not an indicator of future performance, and it’s true that some stocks have collapsed spectacularly in the past.

But just look at what’s happened to Bitcoin over the past 12 months or so. From a peak in December 2017 of a shade under $19,800 per coin, the ephemeral fancy has faded to just $3,600, as I write. That’s an 80% drop in value, and I think it makes those pundits who were trying to talk it up to $100,000 and more look a bit silly now.

But seriously, how much more evidence do we need that cryptocurrencies are not investments, they’re just speculative bubbles based on literally nothing tangible and which are doomed to failure?

Christmas surge

Looking round the commentators of the cryptocurrency world, I’m seeing a lot of excitement over the price of the thing over the Christmas period. Although it rose to $4,300 on Christmas Eve (a “surge” as some have labeled it), even the enthusiasts are turning bearish.

In the words of one writer: “Most analysts in the cryptocurrency space are in agreement that cryptocurrencies are still in a bear market.” You don’t say! As an aside, I reckon anyone who talks about “cryptocurrency space” should be locked in stocks and slapped with wet fish. There’s no new investment “space” occupied by cryptocurrencies, just as there wasn’t for South Sea stocks in the 18th century, or tech stocks in 1999.

There’s only one investment “space”, and it’s the one that’s measured by real currency valuations of companies doing actual business.

Chart madness

Bitcoin enthusiasts are talking about price charts, support levels, resistance, breakthroughs and all that stuff. People do that with stocks too — they call it “technical analysis” to make it sound respectable. In my view, they’re to be ignored because pretty patterns on a price chart tell us absolutely nothing about the actual value of a company itself.

At least with stocks we do have actual real companies supplying actual real goods and services, and we can go and “kick the tyres”, so to speak. But cryptocurrency followers don’t have that. The’ve nothing but the price chart, as there’s nothing tangible behind it and no tyres to kick.

Talk now is of a possible Bitcoin recovery breaking through the $5,000-$6,000 levels again. If that happens, they say we could be in for another bull run. On the other hand, if the price should fall through a line set arbitrarily at around $3,000-$3,200, then that’s the time to accept defeat and sell.

What’s it worth?

Let’s cut through all of that. If anyone has any Bitcoins, I say the time to sell is now, regardless of chart patterns, because you’re holding something of no underlying investment value whatsoever. Sure, maybe some sort of non-centralised currency might be of some value for trading efficiency, but I seriously doubt it. Today’s centralised currencies and payments systems are actually very efficient, and they have that essential characteristic that Bitcoin can never have — stability.

My forecast for the long-term value of bitcoin? Zero dollars, zero pounds, zero euros, zero florins, zero ngultrums.

You Really Could Make A Million Of course, picking the right shares and the strategy to be successful in the stock market isn't easy. But you can get ahead of the herd by reading the Motley Fool's FREE guide, "10 Steps To Making A Million In The Market". The Motley Fool's experts show how a seven-figure-sum stock portfolio is within the reach of many ordinary investors in this straightforward step-by-step guide. Simply click here for your free copy.

Views expressed in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.