See? I told you the Bitcoin Bubble Would Burst

Five days ago the make-believe currency Bitcoin hit $20,000. Today it crashed to $10,000, a plunge of 50%, before recovering to $12,000 (that's a 20% rise). Bitcoin has gone through repeated bouts of bubbles and bursting bubbles over its existence. A chart of its history looks like a roller-coaster.
Bitcoin is fetishized by Libertarian types who are into digital technology. They have fantasies of liberation from government control through technology and a neo-laissez-faire capitalism. This is magical thinking.

With every sharp rise in the price (NOT the value- it has no value) of Bitcoin, speculators pile in, driving the price up more. As in every market mania, there are shills who confidently assert the price will go much higher. (Some jackass insisted a few days ago that Bitcoin would go to $300,000.)

It's the same in other markets. A capitalist polemicist and a pseudo-economist came out with a book in 1999, "Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market." That would have been a fourfold increase, and they predicted it would be by 2002 or 2004. Guess what? Shortly thereafter stocks went into a major decline. And that was followed by the 2008 financial crisis, which caused the stock market to collapse.

Another fool, a "certified financial advisor," pushed a book, "Dow, 30,000 by 2008- Why It's Different This Time."

Yet another shill came out with a tome in 1999, "Dow 40,000: Strategies for Profiting from the Greatest Bull Market in History."

You can still buy this crap on Amazon, amazingly enough. Why anyone would want to buy very wrong, very bad predictions from the past is a puzzle.

For an explanation of what is genuinely destructive about Bitcoin, see "The Great Bitcoin Con Game and How It's Harming Everyone On Earth." (It contributes to global warming.)
https://taboo-truths.blogspot.com/2017/12/the-great-bitcoin-con-game-and-how-its.html

The Great Bitcoin Con Game and How It's Harming Everyone On Earth

First of all, what is Bitcoin?

Bitcoin is fake money. That is, you can't actually shop with it. [1]

And unlike gold, another "alternative" currency, it has no tangible physical existence and no uses (gold has manufacturing uses, also in dentistry, and as jewelry).

The current Bitcoin Bubble is madder than the Dutch tulip frenzy. A year ago, this make-believe money was trading for $700 per Bitcoin- and even that was absurd for something with no actual value whatsoever. Yet it's risen over 2000 percent.

Some U.S. futures exchanges just jumped in to get in on the action. In the first day of trading, the Bitcoin contract closed up 20%, to $18,545. [2]

Unlike other speculative manias, this one is based on absolutely nothing. Even the tulip mania had a physical basis- flowers. Likewise stock market frenzies have actual companies at base. Futures markets trade currencies and commodities like metals and agricultural products. Other exotic speculative instruments were founded on U.S. Government Treasury obligations or aggregated home mortgages.

Bitcoin is based on absolutely nothing, and is backed by no government or central bank. It is a notional pseudo-currency.

The only physical reality of it is the computers doing massive mathematical calculations that is the game that "creates" the non-existent "currency," the Bitcoins.

It turns out that those computers use more electricity than the nation of Ireland (population 4.7 million people). [3]

Power plants have to generate that electricity. It turns out that at least half of the computing done to keep this speculative bubble of nothing inflated occurs in China. China burns coal for most of its electricity. Coal is highly polluting, and releases large amount of carbon dioxide into the atmosphere, warming the planet. 

Thus we have a perfect expression of pure capitalist parasitism helping to wreak havoc on the climate, creating more and fiercer hurricanes, ultimately leading to sea level rises that will flood the coastal regions (and cities) of the continents and create drought and massive famines. In California the Governor has cites global warming as a cause of the massive forest fires that is burning large swaths of that state.

The insane bubble in Bitcoin will inevitably end in tears for some unlucky speculators. (Others with lucky timing will make a killing.) But the real lasting damage is to the planet we live on.  A planet unfortunately at the mercy of greedy parasites.

1]  Only a very few merchants are accepting Bitcoin as payment for purchases. Out of the hundreds of millions of sellers on the planet. And Bitcoin is used for some criminal activities. And computer ransomware extortionists are starting to demand payment in Bitcoins.

2]  Bitcoin started trading on the Chicago Futures and Options Exchanges. On Monday, December 18, the Chicago Mercantile Exchange is going to jump in on the hot action.

3]  BBC, December 12, 2017, morning broadcast.