Dal Bianco said the recent spike in bitcoin prices has increased the buzz around it, attracting more speculators and creating a “self-reinforcing cycle.” Similarly, if collective confidence in the prospects for further price rises is shaken, the resulting economic downturn could be just as sudden, she says. In such situations, demand can disappear as quickly as it forms.
Michael Green, chief strategist at asset management firm Simplify, said on March 3: entered in Betting with podcast host Peter McCormack what did bitcoin do. They were betting on the price of Bitcoin. Mr. Green bet $20,000 that Bitcoin would not reach a price of $100,000 per coin by the end of the year. McCormack bet $100,000 that it would happen.
Part of the motivation for the bet, Green said, was a desire to highlight weaknesses in the economic theory presented as dogma by Bitcoin evangelists. He takes issue with the way Bitcoin is sold to retail investors as a “store of value that is ultimately designed to be the currency of the future,” he says. “I think that's very economic nonsense.” Once people lose access to their wallets irretrievably, the supply of Bitcoin will decline steadily over time, so the cost of borrowing will eventually become almost nothing. Green argues that Bitcoin cannot support a trust system because it will rise to the point where no one can pay for it.
In January, U.S. regulators approved the first wave of Bitcoin exchange-traded funds. This will allow people to invest in cryptocurrencies through securities companies just like regular stocks. The advent of Bitcoin ETFs is aimed at investors (institutional It is said to have caused the recent price hike by unleashing a wave of pent-up demand among consumers (both households and ordinary people). . In approving new Bitcoin funds, regulators are encouraging financial institutions for which ETFs are a new source of income to “spend significant amounts of money on marketing to drive demand,” Green said. This, in turn, prevented him from highlighting the flaws in Bitcoin's logic. Bitcoin Mix.
Belief in Bitcoin's future has become religious, Green says. Green says that missionary zeal is more likely to affect prices than any economic mechanisms built into the system. Even if Mr. McCormack loses his bet, he says, it could be written off as a profitable marketing expense. McCormack told WIRED that the bet with Green was not a marketing stunt. “I made a bet to prove him wrong,” he says.
Angel said that the influence of evangelism on the price of Bitcoin limits the opportunity to have an honest discussion about the future of the Bitcoin system. “Once you drink the Kool-Aid, you have a strong economic incentive to preach the value of Bitcoin to the world. That's the best thing about it,” he says. “If there is a Nobel Prize for marketing, it should go to Satoshi Nakamoto.”
Bitcoin’s biggest boosters embrace that dynamic as well. “The rising price of Bitcoin is propaganda,” Mo said. Investors buy into the prospect of wealth and then fall down the “rabbit hole” themselves, creating a new generation of believers to spread the Bitcoin gospel.