Bitcoin is attracting investors with no idea and it may be a bubble about to burst
WE should all be investing in Bitcoin, even though we have no idea what it really is. Millions of fools can’t be wrong, writes Xavier Toby.
Opinion
Don't miss out on the headlines from Opinion. Followed categories will be added to My News.
SHOULD you buy Bitcoin? Yes, definitely. If everyone buys, that raises the price for people who own some, like me, and it’s your money so I don’t care if you lose it.
This week the price ricocheted around like a cocaine-addicted blowfly and nearly dropped below 10 grand. So I pooled my life savings of $332.50 and went all in. My wife said we needed baby food, but I told her to stress less, because we were about to be rich.
What is Bitcoin? I don’t know either and who cares? All I need is for it to go up another 25 per cent, then I’m going to sell and get baby food in jars instead of cans and wine from a bottle, not a bag.
BITCOIN: FIVE VALUE SIGNS IN CRYPTOCURRENCY
CRYPTOCURRENCIES PUT PRESSURE ON MARKET
I do understand a few things about it. Invented by some super-nerds, if its popularity continues to skyrocket, due to the complex mathematics and computing power involved, it’ll soon be using more electricity than the rest of the planet combined, so may bring forward the impending climate catastrophe a few years.
As it’s anonymous, Bitcoin and other cryptocurrencies are also popular with drug and weapons dealers and other black market activities like slavery.
No time for morals though, I’ve got money to make — $83 to be exact. Fourteen hours in, the price is up 20 per cent. Then it plummets and it’s panic time.
As well as being the leading cryptocurrency, Bitcoin is apparently also a bubble and like the dotcom and 1630s tulip bubble, it’s driven by the excitement of the crowd, people’s fear of missing out and a total ignorance of how markets work.
All bubbles burst, this one sort of just has and I have no idea if it’s now popping or reinflating and neither does anyone else who writes about it.
Those who do know are on yachts picking strawberries out of their champagne glasses and planning their next plastic surgery.
The best analogy I can come up with for Bitcoin is gold.
It’s also a substance that exists in a finite amount with a price that’s dependent on what people will pay for it and is stockpiled by mysterious figures who conspire to fix the price. With Bitcoin they’re called whales, with gold they’re pirates and governments.
Twenty-two hours in, Bitcoin has risen 25 per cent, so I’m out.
Which turns out to be impossible, because the exchange is so overloaded each transaction takes five days to process, so I decide to hang on and see what happens. Luckily though, I manage to scrounge together enough actual coins for baby food and wine.
Xavier Toby is a Sunday Herald Sun columnist
Human cost of pandemic goes much further than virus
Whether you are pro or anti-lockdown the grim, unintended consequences of the fixation on coronavirus are undeniable, as other diseases — including cancer and heart disease — go unchecked, and despair from joblessness, poverty and financial stress rises, writes Rita Panahi.
Premier must outline his plan so Melbourne can recover
As the community overwhelmingly complies with the Premier’s stage four restrictions, he must clearly outline his virus strategy so we can make plans to rebuild confidence and employment in our city, which right now is a ghost town, writes Jeff Kennett.