Bitcoin And Baseball Cards

If Tesla becomes a popular car with drug dealers and other criminals, driving a Tesla could become grounds for suspecting someone of criminal activity. It probably wouldn’t be sufficient grounds for police to get a search warrant, but it would be a big red flag for law enforcement agencies. (I suppose the government can require that Tesla turn over information on anyone who buys a car with Bitcoin in the same way that it requires banks to report large cash deposits.)

The Future of Bitcoin

I am not going to try to make a price projection for Bitcoin. I personally wouldn’t make a bet on it, but that was true ten years ago also when it sold for less than one percent of its current price. Of course. I also wouldn’t put a lot of money in baseball cards, but who knows, the LeBron James card may sell for $30 million in a decade.

It’s still hard to not see these prices as the result of bubbles, since it is difficult to see anything like this much intrinsic value in other a sports trading card or Bitcoin. The sports trading card has the advantage in this area, since at least it is something, whereas Bitcoin is quite literally nothing.

A lesson I learned from the stock bubble of the 1990s and the housing bubble of the next decade, is that bubbles can go on much longer than seems plausible. When the stock market was hitting record levels in 1998, I felt pretty confident that it was in a bubble and that it would likely burst within six months or so. It kept going another two years.

I first wrote about the housing bubble in the summer of 2002. I again thought it was likely to burst within six months or so, but I was smart enough not to say this at the time. It didn’t finally start to deflate until 2006, with the decline first gaining serious momentum in 2007. (In fairness, I never imagined banks issuing and securitizing some of the crazy loans that propelled the later stages of the housing bubble.)

Anyhow, I have no idea how high the Bitcoin enthusiasts will push up its price. The one prediction in which I feel very confident is that it is not about to become a currency that will replace traditional currencies.

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