Thursday, May 13, 2021

Cryptocurrency Short Comment — Brian Romanchuk

Although I had written a couple of theoretical articles some time ago, I have largely ignored cryptocurrencies. However, there has been enough newsflow about them that I decided I could do a drive-by comment. In case one wants an investment recommendation, all I can say is that the underlying problems they face are straightforward, I have no way of knowing the timing.

The thing I find most interesting is that attention has switched to Dogecoin, which is a meme coin. The reason why this has happened is solely based on the fact that its price rose by more than Bitcoin. This deflates much of the propaganda being emitted by Bitcoin enthusiasts, who insist that Bitcoin will replace fiat currencies and lead to a libertarian economic utopia. Instead, most people are buying it because the price went up. The doggy coin price went up? Well, buy that one.…

The greater fool strategy.

Bond Economics
Cryptocurrency Short Comment
Brian Romanchuk

4 comments:

Peter Pan said...

Okay, so I'll put off having my buttered popcorn ready.

Joe said...

"crypto is just an outlet for gambling-like behaviour."
ding ding ding! We have a winner.

Except I'm not sure how it's gambling-"like" and not just plain old regular gambling. I'm still holding firm on crypto never being anything more than it already is, just a casino. There'll be a few winners, a lot of losers, just like a casino.. Bitcoin's eventual fixed suppy pretty much rules out it ever replacing a national currency.

Mike Norman said...

EVERYBODY misses the point. Crypto's are a manifestation of the Rest-of-World seeking an alternative to the dollar-based, global payments system, which the U.S. has been increasingly weaponizing. It's not going away as long as this U.S. policy continues.

Peter Pan said...

Well, they better keep seeking that alternative because crypto is ill-suited for that purpose.