Bitcoin crashed again, falling from $70k to $65k. It’s always the same justification given by the media for why Bitcoin falls, either blaming the fed, inflation, or the economy, but never the fact that Bitcoin is a bubble and unsustainable. The Bitcoin chart is a facsimile of 2022, when it dropped from a peak of $69k in November 2021 to $16k by December 2022.
All the usual pundits like Tom Lee were ‘100% certain‘ Bitcoin would be at $100k by now (just like they were in 2018, 2019, 2020, 2021, and 2022; see a pattern?). And as always the rug gets pulled out. There is a recuring tendency in crypto in which the price collapses as hype reaches a climax.
True, Bitcoin is still up considerably since late 2022, and although I am wrong right now, seven months remain for 2024 for my predictions to come true. On the other hand, the promised six-figure price targets are still on the distant horizon as well. At least my $20k target has some historical precedent, having happened in 2022, whereas the $100k targets are still a delusion or wishful thinking.
But the risk vs. reward metrics are horrible given Bitcoin’s tendency to suddenly plunge and long-term inability to hold gains. It’s evident based on historical data that $20k is a stronger magnet than $80+k. It’s only up 3.2x after having peaked in $20k in late 2017, which is not even that good and easily surpassed by many stocks, like Nvidia.
The only justification for buying crypto is to resell it at a later date for a higher price. Unlike stocks, there are no fundamentals, like profits, to provide any foundation or floor for the valuation of Bitcoin. It’s more like a pyramid scheme, and at some point the money runs out, at which the whole thing collapses. Those hoping to get out before the music stops will find that they had been set-up from the onset. There is not enough money in the world for everyone to get rich this way if money or wealth are to mean anything.
Is cryptographically irrevocable currency useful? Possibly. Criminals prefer crypto as payment for this reason. But is this worth $1 trillion? Likely not. The problem is that converting ‘crypto’ into spendable money is hard, as court records show of hackers and scammers failed attempts at laundering crypto.
The fiat-based financial system, for all its flaws, still works well enough that Bitcoin is not a competitor or threat to it. Outside of the ‘dark web’, there is no need for Bitcoin. These may be fighting words, but I am still waiting for the ‘mass adoption’ that was promised 12 years ago.