Finally, I think the Bitcoin improbability bubble has burst. Ever since it claimed it was mainstream and respectable back in January when the SEC was bounced into giving regulatory approval for Bitcoin ETFs, it has crashed 15%! How loudly be the Trickster Gods of Finance laughing at the absurdities of it all. It was a classic Buy-the-Rumour, Sell-the-Fact moment, catching out all the “greater fools” who were persuaded to buy ahead of the approval on the basis it could only go up. Wrong; the laws of mean reversion mean something worth nothing will revert towards nothing.
I consider Bitcoin complete froth and nonsense. All this malarky about a limited number of coins, and making them progressively more difficult to mine (via “halving”) get the believers terribly excited. Yet, these mechanisms and limits exist only to keep pushing up the price. For that to keep happening the “interested parties” lurking behind Bitcoin need to keep convincing the marks – i.e. any gormless Crypto buyer – that it has real value, longevity and utility.
Sadly, there is absolutely no investment case for Bitcoin. It does not pay interest, it is not a store of value in any understood sense, and it offers zero utility or unique use case. But it does one thing; as long as people are prepared to buy it, it should continue to go up. To keep the number of “greater fools” buying it, the only thing that matters for Crypto shysters is ADOPTION. That was the plan from the start. To work, Bitcoin has to continuously persuade converts it will achieve and sustain mass-adoption. Simple as. If that sounds ponzi-esque… top of the class.
The issues to consider are simple: is Bitcoin in particular, really going to garner mass adoption and be widely used as a global currency, means of exchange and store of value?
When Bitcoin launched in January 2009, the world was a very damaged place and trust in fiat currencies had taken a battering in the Global Financial Crisis. Speculation fuelled by ultra-low interest rates was coming to fore, driven by a hope/belief new technologies could rescue the battered post-Lehman GFC global economy via everything tech and digital – the internet-of-things (remember that) – and disruptive concepts like fin-tech and electric cars.
Someone had that judder moment insight: why not equally disruptive digital money?
Bitcoin inventor Satoshi Nakamoto (who is likely a collective of clever proto-fin-tech nerds) spotted the opportunity to play the Zeitgeist of the time, spice it with some libertarian balderdash about freeing money from government control, and created the ultimate get-rich-quick scheme.
