Bitcoin is dying, this is according to Atulya Sarin, Professor of Finance in the Leavey School of Business at Santa Clara University. He claims that the leading crypto is on a swift and painful drop to zero. It’s costing too much to mine, says Sarin, who apparently knows the highly individualized costs of every Bitcoin mine in the world. It has also crashed faster than ever before, which apparently counts for something, as does his insinuation that those who have lost out won’t buy in again, and also that the futures will be the death knell for the ten-year-old cryptocurrency.
Someone in such an eminent position with finance qualifications galore must know what he’s talking about, so it seems we should all pack up and go home. The party’s over, and someone’s got to pay the bill.
Not Dead, Just Sleeping
Except that we’ve been here before, many times. 329 times, according to Bitcoin Obituaries. Of course, Sarin could be right where 328 have been wrong, but Bitcoin has fought off the negative attentions of oppositional nation states and law enforcement in its time and it’s still standing.
At times like this, when prices are down and knives are out, it’s worth reaching back for previous examples of when crystal ball gazers with an axe to grind have been wrong… very wrong.
2011 (price $15) – Forbes claims that the 2011 China-induced crash spells the end of Bitcoin. Seven years later and that premonition is looking weaker and weaker.
2013 ($131) – On the verge of the 2013 bull market peak, Chron told us that Bitcoin was “doomed to fail” because it has “no fundamentals beyond the news cycle”. Citizens of countries experiencing massive currency inflation crises may beg to differ.
2014 ($327) – The 2014/15 bear market was brutal, no doubt about it, which is probably why many outlets took the chance to engage in some Bitcoin bashing. To this end, another finance professor took to City AM to tell us that investors should abandon the doomed cryptocurrency. Those that took his advice would be kicking themselves three years later when the price crossed $10,000.
2015 ($236) – The Washington Post didn’t know if Bitcoin was a Ponzi or a pyramid scheme, which calls into question the depth of their research on all fronts, so it just labelled it as either. Despite banking greed having caused the global crash in 2008, the Post still claimed that a “trusted third party, like a bank” should sit in between financial transactions. Enough said.
2017 ($3,438) – “What is Bitcoin? Nobody knows” claimed Splinter in August 2017, setting the tone for a bizarre article that reads like someone bashing down your door, ranting at you on a topic they don’t understand, and then storming out thirty seconds later. In it the writer says that a “real” $20 bill is better than “fake” Bitcoins that can’t be spent anywhere, which is just plain wrong and shows an ignorance of the true value of paper money.
I Will Survive…
In the throes of a bear market it can seem like an asset is dead, but Bitcoin has proven time and time again that it can come back fighting. The US Dollar is over 225 years old compare to Bitcoin’s 10, so it’s understandable that it has built up a strong fan base and is not as volatile in its old age.
Bitcoin’s fundamentals have never been stronger, and when the current bear market ends, there’s every chance we’ll be adding Mr Sarin’s name to the growing list of people who got it wrong.