Paul Krugman Slams "Wealthy Libertarians" for Their Role in Promoting Bitcoin

He writes:

At the end of 2013 I wrote a post titled “Bitcoin is evil,” riffing off Charlie Stross’s “Why I want Bitcoin to die in a fire.” Charlie and I both keyed in on the obvious ideological agenda: Bitcoin fever was and is intimately tied up with libertarian anti-government fantasies.

So how’s it going? Bitcoin prices are down by two-thirds from their peak, and Izabella Kaminska, who has stayed with the subject, finds the sad story of a gullible rube who appears to have impoverished himself by believing in the hype. She comments:

Some extremely wealthy libertarians have a lot to answer for if these sorts of ppl lose all due to believing in them.

Krugman has a point. There have been libertarians who have promoted Bitcoin as the second coming of gold. Gold 2.0, if you will.

This, of course, is absurd. As I have relentlessly pointed out here at EPJ, Bitcoin is NOT a libertarian currency. It is a very trackable currency, which means that gold, the metal, is far superior. As the old Swiss proverb goes, "Gold has no smell."

But, further, Bitcoin, as I have pointed out is a very edgy investment that has all the earmarks of a pump and dump scheme. As I write, Bitcoin is down $28.18 today to $326.32. Year-to-date, it is down 59.23%.  It is off aprox. 73% from it all time high in the range of $1,200.

Basically what went on here is you had  massive amounts of money pouring into Bitcoin from geeks with money and libertarian geeks with money. They are the ones that pushed it to its all time highs, but once they were all in, and there was no larger crowd to push the price higher, the inevitable meltdown began as a result of buying exhaustion. There may be some short-term rallies from time to time, but the downtrend is far from over.

The Bitcoin downward spiral:

-RW