Keeping your head when others are losing theirs

Pointing to gold, the only important exception to the intrinsic-value rule is a very weak justification for arguing that Bitcoin will retain its value

Avinash Luthria

We will most likely remember 2021 as the year in which a lot of people lost their heads. It is impossible to forecast how long it will take the mob to regain its sanity. These are the top four ways in which the mob lost its head in 2021.
Bitcoin mania
Bitcoin does not have any intrinsic value. The only argument that Bitcoin fans have is that gold, too, has very little intrinsic value. Firstly, it is absurd for several large cryptocurrencies to claim that they alone are the new form of gold. Second, pointing to gold, which is the only important exception to the intrinsic-value rule, is a very weak justification for arguing that Bitcoin will retain its value. Thirdly, it is because gold has almost zero intrinsic value that it is so volatile. In dollar terms, gold lost 83 per cent of its purchasing power between 1980 and 2001 and is yet to reach its inflation-adjusted price from early 1980, that is, 42 years later. Finally, independen
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

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First Published: Dec 26 2021 | 10:07 PM IST

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