Every big movement, either up or down, provokes people to search for the answer: what Bitcoin (and its relatives) really is, what it isn’t and is this exact moment good for buying or selling it. After a series of crashes Bitcoin is now 35 percent cheaper than it was. Before we’ll decide whether we should buy it, keep it or sell it, let’s answer if Bitcoin is for real at all.
Bitcoin is not ‘real’
The statement that Bitcoin isn’t real is the most often heard argument against it. Briefly speaking, it is a half-truth. The same set of criteria that make Bitcoin ‘not real’ once applied to any financial tool of today will render them ‘not real’ too. Let’s take your regular paper money: they are issued by government or even private entities. The amount of money printed is enormous and is limited by governing body understanding of how much there is needed. It no longer serves a measure of value, the banknotes are a measure of some abstract debt. Yet you can buy something you need with it. The same with bitcoin. There are plenty of goods that can be bought with Bitcoin directly. And even more – through conversion of the crypto currency to fiat money.
More complex instruments, like bonds, shares and derivatives are even less ‘real’ because, just like with paper money there is no limit to issue them.
And well, shut up with the ‘tulip bubble’ narrative. Just like any financial tool crypto is subject to speculative growth and decline. Should we have a tulip bubble in this century, the government would bail out tulip growers to prevent major consequences. Mark my words: tulip back then were more useful as nearly all securities now.
The SEC recognises Bitcoin as a valuable asset and security and that’s all we need to know to answer if it is ‘real’. It is as real or as unreal as any other financial asset.
Bitcoin is a cult
Paul Krugman argues that bitcoin is a cult and therefore can never die out completely. A ‘cult that can survive indefinitely’. Wealth, the good old Mammon is the cult. It took the shape of Bitcoin in the XXI century. The rapid growth of the asset, mysterious origin and an extravagant bunch of supporters make Bitcoin look somewhat cultist. It wasn’t as boring as your chartered accountant. But the wider the adoption the more chartered accountants encounter it on a daily basis. Bitcoin has gone pretty mainstream.
Bitcoin will survive any crashes and the only question is at what rate it will crash again – or start the next trip to the moon. It is not the cult itself, it is a reflection of radix omnium malorum. Bitcoin’s future is secured by the very nature of humanity.