The Case Against Bitcoin
There is not anything pressing right now that I need to write about, so I thought I would return to an old punching bag that I have not punched in a while. No, it is not Jim Cramer, Elon Musk, or Cathie Wood. The punching bag as you could tell by the title is Bitcoin and crypto. In this article, I will use Bitcoin and crypto interchangeably though.
I have been a crypto-hater for a long, long time. I was hoping that it had all died in 2022 after Bitcoin lost 75% of its value in 10 months, but sadly, Bitcoin came back like a rabid dog, and it made me mad. Now, Bitcoin is pretty much at an all-time high, having slipped back from the $100,000 mark it broke a week ago. All of this optimism stems from Trump’s victory in the election.
Throughout his campaign, Donald Trump was glowingly positive towards cryptocurrency in an attempt to curry the favor of crypto-bros, which irked me. I hate Bitcoin more than I have ever hated Bitcoin, and I think, now more than ever, that Bitcoin is wildly overvalued and pretty much garbage worth not even a dollar.
The price right now is predicated on so, so much going right for Bitcoin. For example, they first need Donald Trump to nominate and get people past Congress who love crypto. Then, they need those nominees to hire people who love crypto. Then, they need those employees to actually do stuff to advance the crypto agenda. Then, they need the next president following Donald Trump to love crypto just as much if not more. Crypto bros also need Donald Trump to not have been lying about loving something to get votes (something that would not be out of the ordinary for a politician), as I am pretty sure he was. I mean, come on, the guy has no clue how any of this works, and I doubt he could give a coherent explanation of the blockchain (not a political thing, just a recognition of the likelihood that his crypto-love was an election fad).
Crypto bros also need Bitcoin to become worthwhile in the peer-to-peer market, which will never, never happen. The price is too volatile to ever become useful to anyone, and the US government, even with Donald Trump at its head, would never ever allow Bitcoin to be used in place of the US dollar in daily transactions to any degree beyond the creepy 4Chan pervert using Bitcoin to buy body pillows.
Oh yeah, did I mention that there is NO INTRINSIC VALUE. ARE YOU KIDDING ME? I know the take that there is no actual value to the currency (not really a currency) will get me labeled as old (I’m 17) and cranky (I actually have a sunny disposition), but it is true. There is no intrinsic value to Bitcoin. The only value any of this garbage has is the blockchain, which is great, but it is not $2 trillion market good, the market cap of Bitcoin alone.
There is no regulation.
Everything is gambling and speculation.
There is too much volatility.
The process is too complicated for the average person.
This whole thing is just suckers selling to other suckers who think they will get rich gambling on something they do not understand. If they did understand, they would not put a penny in.
I found this guy, Stephen Diel, online, who wrote this really interesting article here. This is an excerpt I really liked.
“They are effectively unregulated securities where the only purpose of the products is price appreciation untethered to any economic activity. The only use case is gambling on the random price oscillations, attempting to buy low and sell high and cash out positions for wins in a real currency like dollars or euros. Yet crypto cannot create or destroy real money because unlike a stock there is no underlying company that generates income. So if you sell your crypto and make a profit in dollars, it’s exactly because a greater fool bought it at a higher price than you did. So every dollar that comes out of a cryptocurrency is because a later investor put a dollar in. They are inherently zero-sum by design, and when you take into account the casino (i.e. exchanges and miners) taking a rake on the game then the entire structure becomes strictly negative-sum. For every winner there are guaranteed to be multiple losers. It’s a game rigged by insiders by hacking human psychology.”
