Tract on Bitcoin
Dr. Roman von Ah
Financial Markets
Those who invest in Bitcoin have only themselves to blame
Those who invest in Bitcoin have only themselves to blame
Bitcoin's price movement since the beginning of the year is over 1000%. In comparison, other speculatively inflated market price movements look like orphans. The chart shows the price movement of Bitcoin in the first 11 months of 2017. In contrast, the price movements of various speculative exaggerations (bubbles) over 10 years are shown:
- Japan stock bubble (Topix Index)
- TMT bubble USA (Nasdaq Index)
- Subprime real estate bubble USA (Case-Schiller Index)
- Gold price for comparison
At a 1000% annual return, it would not take long for the value of Bitcoin to equal a large city, province, country, continent, the entire earth, and eventually the number of atoms in the universe.
Manias in the financial markets
Bitcoin will never, ever be a money substitute:
- It is not suitable as a means of exchange / payment
- It is not suitable as a unit of account
- It is not suitable for the storage of value
The media hype tempts some people: if everyone is talking about it, then there must be something behind it? No, there doesn't have to be. It is pointless to refer to lemmings here ...
But financial service providers bring investment products to the market, so there must be something behind it? Of course: you can earn commissions and margins with it; but that says nothing about the usefulness and meaningfulness of Bitcoin. The right question in this context is: would these same financial services providers use Bitcoin in the management of their own pension fund assets? Of course they wouldn't.
Trying to interpret Bitcoin as anything other than a speculative bubble is an obvious waste of time given the vertical curve. Basta.