That’s about the only real takeaway we have from the latest symbolic milestone for the granddaddy of cryptocurrencies. Its price in dollars has multiplied ten-fold this year — without any of its flaws as a method of payment being fixed convincingly. Transactions are still costly and slow.
Wall Street investors and the average punter are desperate to ride a boom that is openly touted as unsustainable, even by its cheerleaders. At the sophisticated end of the market, the Bitcoin Investment Trust — a way to profit from the cryptocurrency without holding it — has reached a 62 percent premium to net asset value. The shares have jumped 50 percent in three days. At the consumer end, account openings are in the six figures. Google (NASDAQ:) searches for “Bitcoin loan” or “Bitcoin credit” are rising.
This isn’t about investing for the future, but getting rich now. Vanguard’s Jack Bogle is right to say that there is nothing to support Bitcoin except the Greater Fool Trade — the hope that there will always be someone in future willing to buy your asset at an even higher price. But even Bogle isn’t ruling out a doubling of Bitcoin’s price from here. He’s right there, too…