Bitcoin is 10 years old now. Is it really a reason for celebration? Bitcoin’s price has plunged to near $4,000, down 30% in a month, 50% in the last six months and nearly 80% since last December.
Cryptocurrency experts are blaming all the temporary offenders, from jumpy markets to hard forks. But they’re kidding themselves. It’s a long-haul unraveling of all the lies populist fantasies and exaggeration which drove last year’s market mania.
Bitcoin was something that was meant to make all of its investors rich, to be free of Wall Street’s corruption as well as the US government’s meddling technocrats, to be secure and what not. It would, for the hardcore evangelists, reward its acolytes when the inevitable financial apocalypse arrived.
It was even meant to show that we all should stop listening to the experts like Warren Buffett, Jamie Dimon, and Jack Bogle. The buying power of the masses would usurp the old closed ways of investing.
Unsurprisingly, the Bitcoin bubble of 2017 has enriched just insiders like mining companies and crypto-exchanges, and the early birds who cashed in at the right time.
There’s nothing on the Bitcoin label that turned out to be inside the bottle. As a means of payment, it is expensive, volatile and cumbersome. It has even destroyed the value instead of storing it. The decentralized technology of Bitcoin was sold to investors as being unique.
Those hard forks have made numerous Bitcoin spin-offs over the last year, and the vested interests of those who are making money from doing this have triumphed over the dreams of a neutral blockchain system which would treat everyone equally. Also, the hedge fund folk have been proven wrong in the market where prices, as well as information flow, are not transparent, thus, manipulated.
Indeed, the crashes are a part of history. In case regulators, as well as journalists, do their job of cautioning customers of the risk, then why shouldn’t individuals be free to do what they like with their cash?
While bitcoin is on the lines, it merely hasn’t gone away. Global regulators yet to find an effective way to rein in the cowboys. While it hasn’t been a systemic risk so far, the ultimate spread of cryptocurrencies will mean that isn’t dependably the case. At last, if the frustrations which drove people to chuck their savings at a digital Ponzi scheme are not resolved, we are only setting ourselves up for the bigger political trouble down the line.