OPINION: No one has ever invested in bitcoin. They speculate. That's why you shouldn't be able to invest in bitcoin ETFs, Roger Lowenstein writes.
One of the most misleading statements, if not an outright lie, about cryptocurrency is that people invest in it.
The government defers taxes on retirement funds for two sound reasons. Society benefits when people accumulate savings, because they are less likely to become indigent. And it benefits when people invest, rather than consume, because the country thus accumulates capital. The statement is reductive: “It has value because it has value.” In truth, bitcoin is not used as currency. No one asks the price of a washing machine denominated in bitcoin.VanEck’s second rationale, “Bitcoin adoption continues,” does not advance an investment case. It conforms to the explanation offered by Charlie Munger — “somebody else is trading turds and you decide” to trade them too.
It is not a currency and it is not equipped to serve as a currency. It is far slower than the systems used to process Mastercard and Visa . It is way too volatile to serve as a measure of payments. VanEck also asserts a scarcity value. Scarce? There are 1,300-plus cypto-currencies and no limit on new ones. And scarcity does not suffice as an investment case. Rare turds are still turds.
Neither the press nor Wall Street have been adequately skeptical of crypto. Each has fallen for the dismal stupidity that since bitcoin is “volatile,” it should comprise only a small portion of investor accounts. But volatility is not the main problem. It is a symptom of the problem, which is underlying worthlessness.Washington should note that the median retirement account is only $65,000.
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