Every time Bitcoin crashes, I get the exact same question. And my answer is always the same. Partly because I believe it's far more courageous to shout that the emperor has no clothes while everyone still sees them, not after. And partly because I have no interest in commenting on individual events when the general rule is predictive and robust.
No intrinsic value
Bitcoin and every crypto and NFT have zero intrinsic value. Their price — a different concept from value — depends solely on temporary market moods. Exactly like when in 17th-century Holland a tulip bulb cost more than a year's salary. Actually it's worse: at least tulips have aesthetic value.
Having a price tied to moods means oscillations: today it's worth 10, tomorrow 100, the day after zero. It's intrinsic to their nature.
"Bitcoin is not Money"
As finance professionals say, "Bitcoin is not Money." And it never will be currency. It lacks the fundamentals. Its wild fluctuation prevents its use as a store of value. Its inability to be inflated at will prevents its use as a lever for lifting economies during dark times — the Keynesian concept at the foundation of every real economy: if you don't want people dying under bridges during crises, you must be able to act on the value of money.
Hindsight bias and survivorship bias
Due to well-known cognitive biases, the human mind lacks the tools to understand that previous rallies aren't guarantees of the future and don't imply you could have made money. Almost all crypto profits were made by a few actors who drove the rallies. The individual speculator always arrives late, when only crumbs of profit remain but immense risks of loss loom.
The obvious bubble
When have you paid for a pizza with crypto? They've existed for over a decade. And when has an institution accepted an NFT or smart contract in place of a notarized document? Smart contracts have existed for nearly ten years. It's an enormous bubble.
A bubble destructive not only to wallets but to the environment. Bitcoin handles a tiny fraction of transactions compared to normal payment circuits, yet each transaction dissipates nearly two million times the energy. That alone should keep decent people away from this toy.
A cult of extremists
My biggest failure is trying to discuss with crypto fans. It's impossible. I've been attacked by journalists and famous people clearly incapable of using a calculator. There's no dialogue. They're members of an extremist cult completely detached from reality. I've received physical threats. My loved ones have been threatened.
My brotherly advice is to stay away from this mess. Or study it on your own, using protective instruments like derivatives, and never ever join these cults. The first thing they do is cut your contact with the world and your loved ones, dismissed as losers. Then they drain your brain and your wallet. Be careful. These are dangerous people.
