Bitcoin turns 10 this year, but there’s not much to celebrate. Its price has tumbled to near $4,000, down 30 per cent in a month, 50 per cent in six months and almost 80 per cent since December.
The crypto-currency experts, who clearly didn’t see this coming, are blaming all sorts of temporary culprits — from jittery markets to “hard forks” (blockchain jargon for radical technical changes in a digital currency.) But they’re kidding themselves. This is a long-term unravelling of all of the lies, exaggeration and populist fantasies that drove last year’s market mania.
Bitcoin was meant to make all of its investors rich, something that held particular appeal to a millennial generation hungry for a financial boost in a world of crushing student debt, income inequality and low quality jobs. It was meant to be free of Wall Street’s corruption and the US government’s meddling technocrats. It was meant to be secure, with a price that would go ever higher. For the hardcore evangelists, it would reward its acolytes when the inevitable financial apocalypse arrived. The dollar was destined for scrap.
And it was meant to show that we should all stop listening to fuddy-duddy “experts” like Jamie Dimon, Warren Buffett and Jack Bogle. The old closed ways of investing would be usurped by the buying power of the masses.
Unsurprisingly, none of this has come to pass. The bitcoin bubble of 2017 — mercifully short and economically contained — has enriched only insiders such as mining companies and crypto-exchanges, and the early birds and tech elites who cashed in at the right time.
For the patsies who arrived late to the party, it has been a tool of financial impoverishment. About $700 billion has been wiped from the value of digital money since January.