You know, for something that isn’t inherently dubious, Bitcoin sure does have a lot of prominent detractors.
And when something explodes onto the financial scene and stages a world-beating rally to cat calls from prominent members of the establishment, it usually means one of two things:
- it is in fact dubious and will one day collapse
- everyone got it wrong, missed the boat, and the establishment does a group mea culpa after the world briefly passes them by
But there aren’t too many cases where there’s an in-between. That’s what’s unnerving about the following clip from a CNBC interview with Prince Alwaleed bin Talal:
So this is another one of those times where the crypto crowd is going to go crazy and not just because this is a petrodollar prince bashing Bitcoin, but also because his assessment is pretentious.
I just don’t believe in this Bitcoin thing, I think – I think – it’s just going to implode one day.
The rest of his rationale is similarly straightforward. And see that gets us right back to what we said here at the outset and what we’ve said on too many occasions to count. Namely that there is a long list of common sense reasons to think the Bitcoin bubble is going to crash and burn in spectacular fashion and the reasons to think it won’t are in many cases based on the assumed ascendancy of the technology and the inability of governments to either i) replicate it and then co-opt it, or worse, ii) simply shut the whole thing down.
Someone is wrong here, and “big league.” That is, this isn’t like two people disagreeing on whether Tesla is grossly overvalued or not. This is the establishment telling you that this is doomed and the crypto crowd telling you it’s going to change the world. Again: someone is “bigly” wrong.
And here’s the thing: we actually hope it’s the establishment that’s wrong, because God knows they’re never going to have to worry about money regardless of what Bitcoin does or doesn’t do. Meanwhile, it certainly wouldn’t hurt the world if a superior technology supplanted an antiquated system and some folks who weren’t rich before made a fortune in the process.
Our worry is that the establishment is right but more importantly, that the establishment has the capacity to rig the odds in their favor. That is the risk.