Bitcoin Surges As Microstrategy Buys Another $10 Million

Was that it for the bitcoin "crash"?

Just as bitcoin was tumbling last night, we refuted the latest report from JPMorgan (see "JPMorgan Tries To Slam Bitcoin Again, Fails Spectacularly") which - for the third time in 2 months - tried to slam the cryptocurrency by claiming that bitcoin was not a good "diversifier" even as it paradoxically made the strongest possible case for bitcoin as a diversifier, stating that "cryptocurrencies would uniquely protect portfolios against a simultaneous loss of faith in a country’s currency and its payments system, because they are produced and they circulate outside conventional and regulated channels" and adding that "as insurance (or a lottery ticket) against dystopia, some exposure to these assets could be always justified irrespective of liquidity and volatility concerns."

Well, JPMorgan, this may come as news to you, but nobody is buying bitcoin to diversify their stock holdings - for the simple reason that as Convoy Investment put it "Bitcoin Is A Giant Bubble... But The Global Fiat System Is An Even Bigger Bubble", but to precisely hedge the collapse of the entire fiat/monetary system.

Our rebuttal, incidentally, bottom-ticked the overnight crypto selloff.

(Click on image to enlarge)

No matter though, because the sharp selloff in bitcoin, ostensibly sparked by fake news about a "double-spending" in the bitcoin blockchain, was enough to bring all the "bubble has burst" callers out of the woodwork, with Deutsche Bank's Jim Reid writing this morning, humorously to be sure, that "the Bitcoin price move to the recent peak was ‘only’ around half that of the tulip bubble back in 1637. It’s probably not a chart to take too seriously but it shows some of the big bubble type moves of the last 50 years in some historical context".

(Click on image to enlarge)

Reid did have a very good point, however, noting that "in doing the research on bubbles for the pack, it was noticeable that there were more potential examples of bubbles over the last 50 years than any other period in history" noting that his "view has long been that it’s also a product of the fiat money system we’ve been in since 1971." Which, of course, is the very reason behind bitcoin's explosive growth.

1 2
View single page >> |

Disclaimer: Copyright ©2009-2021 ZeroHedge.com/ABC Media, LTD; All Rights Reserved. Zero Hedge is intended for Mature Audiences. Familiarize yourself with our legal and use policies every ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.