Bitcoin crumbles after Elon Musk bails. Why it may never recover
Bitcoin has fatal flaws and is now a novelty, not the currency of the future
In technology, the winner isn't who comes first, it's who has the best technology.
Few would still argue that bitcoin is the best-designed crypto currency. It's slow, its governance is a mess and it has a critical flaw -- energy use.
With the Colonial Pipeline shutdown ongoing, he has a point. Bloomberg reports that $350m was sent to cryptocurrency wallets associated with ransomware attacks last year.
I don't welcome a currency that's so useful to kidnappers and extortionists and so forth, nor do I like just shuffling out of your extra billions of billions of dollars to somebody who just invented a new financial product out of thin air.
I think I should say modestly that the whole damn development is disgusting and contrary to the interests of civilization.
Of course, Munger been hating on bitcoin for years so I shouldn't give him too much credit. What's new today is that Elon Musk has made a U-turn on bitcoin in a statement:
"Tesla has suspended vehicle purchases using bitcoin. We are concerned about rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.He left the door open to using it again if it transitions to better energy use but that's not realistic. If a Chinese miner uses only renewable energy, that energy could still be attached to the grid to displace coal. It's a no-win situation for bitcoin.
Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment."
I have said that I believed bitcoin would get to $100,000 this year on a US ETF but the tide has quickly turned and I'm wondering if the SEC might draw the same conclusion. Ultimately, bitcoin is a psychological trade, not a fundamental one. When I first predicted bitcoin would hit $10,000 back in 2013, it was because there were so many 'true believers'. I was astounded by their commitment to it and I also recognized its value to money launderers and criminals.