It’s starting to feel like we may be on the verge of seeing the next shoe drop when it comes to Bitcoin’s inevitable date with zero.
Generally speaking, no one gives a shit about make-believe space tokens these days. Here, look (click to enlarge):
Turns out, that’s what happens when scores of people buy something trading at $20,000 on their credit card, only to watch in horror as the value of that thing they took out a high interest, revolving loan to finance plunges by ~60% in the space of three months.
Recall this chart that documents the results of a LendEDU study published literally one day after Bitcoin peaked in December (click to enlarge):
Bitcoin (and the cryptosphere more generally) have had a variety of scares in 2018 thanks to all manner of issues including, but by no means limited to, increasingly aggressive regulatory maneuvers, massive theft (here and here), and risk-off sentiment tied to the volatility in equity markets.
Meanwhile, the cat calls continue to rain down from policymakers, government officials and analysts. Check out this excerpt from a post that showed up on the official Allianz website last week:
This brings us to a key question: what is the fair value of a bitcoin? In our view, its intrinsic value must be zero: a bitcoin is a claim on nobody – in contrast to, for instance, sovereign bonds, equities or paper money – and it does not generate any income stream. Admittedly, one could make the same argument about gold, but gold has been widely accepted by humankind as a thing of value for more than two-and-a-half thousand years – compared to less than a decade for bitcoin.
There you go. And again, that’s just one recent example of derogatory Bitcoin commentary from the “establishment” (which is what the crypto crowd calls anyone who isn’t hanging out on the roof of an abandoned monastery fantasizing about building a tax dodge paradise amid the ruins left by a devastating Cat 5).
Well, in the latest piece of evidence that the clock is running out on made-up internet money, Google is going to go ahead and follow in Facebook’s footsteps by banning ads for cryptocurrencies and anything else deemed a “speculative financial products.”
Invariably, cryptocurrency proponents will swear that this is just another example of “big brother” trying to decide what you can and can’t be exposed to but, as The Wall Street Journal reminds readers, “one new tool in the scammer’s arsenal is crypto-jacking, or putting lines of code in websites or ads to surreptitiously harness the computing power of the web surfers who look at them [and Google] has long banned ads promoting counterfeit goods or dangerous products.”
Now you can quibble with that latter policy if you like, but I’d imagine you’re not too keen on being crypto “jacked” (off) and unwittingly used as a Bitcoin miner, which sounds a lot like the robots in the Matrix harvesting you for your energy.
Additionally, there’s something profoundly ironic about people who ostensibly champion Libertarianism suggesting that private companies like Google and Facebook shouldn’t be allowed to make their own decisions with regard to who can and can’t advertise.
FT notes that this will of course “undermine the ability for cryptocurrency exchanges, advisory firms and digital wallet companies to reach new customers.”
Right. And see here’s the thing. The fact that so many people apparently bought Bitcoin at the highs in December using their credit cards clearly suggests that some kind of benign paternalism is desirable here.
I mean, Wall Street was justifiably crucified for their role in facilitating the financial crisis by constructing leveraged financial “WMDs” and everyone (including your friendly neighborhood Heisenberg) gets their jollies lampooning CNBC personalities for leading the “lemmings” off a cliff, but hell, at least there were actual assets buried in the structure of those WMDs and at least CNBC is talking about things (stocks) that really exist.
When it comes to the cryptoverse, there are still very good arguments to be made to support the contention that there’s “no there there” (so to speak). That is, potential investors are throwing money at things that are not only bound to depreciate, but never had any value in the first place.
So before you get mad at Google for their new cryptocurrency ad policy, maybe try and channel your future self and picture how angry future you will be when the credit card bills keep coming in despite the assets you bought on the old plastic having flatlined.