I actually think Paul Krugman is going to be right on this one (well. at least the part I quote of a recent column of his).
He writes:
The other day my barber asked me whether he should put all his money in Bitcoin. And the truth is that if he’d bought Bitcoin, say, a year ago he’d be feeling pretty good right now. On the other hand, Dutch speculators who bought tulip bulbs in 1635 also felt pretty good for a while, until tulip prices collapsed in early 1637.-RW
So is Bitcoin a giant bubble that will end in grief? Yes...
Oh, and Bitcoin’s untethered nature also makes it highly susceptible to market manipulation. Back in 2013 fraudulent activities by a single trader appear to have caused a sevenfold increase in Bitcoin’s price. Who’s driving the price now? Nobody knows...
When it comes to cryptocurrencies there’s an additional factor: It’s a bubble, but it’s also something of a cult, whose initiates are given to paranoid fantasies about evil governments stealing all their money (as opposed to private hackers, who have stolen a remarkably high proportion of extant cryptocurrency tokens). Journalists who write skeptically about Bitcoin tell me that no other subject generates as much hate mail.
So no, my barber shouldn’t buy Bitcoin. This will end badly, and the sooner it does, the better.
Well, if Krugman's panning it, that must make Bitcoin a "buy."
ReplyDeleteI love the bit about "... something of a cult, whose initiates are given to paranoid fantasies about evil governments stealing all their money ..." I would say his fetish with fiat currency is at least an equivalent cult. And the government does steal our purchasing power, through monetary inflation.
And taxes.
DeleteThe worst part is the end where he wishes doom upon others. What does he care if the crypto markets carry on forever? Are they really doing that much harm?
ReplyDelete