First of all I do not own any Bitcoin or any other cryptocurrency and I have never owned any. So, I have no personal stake in them. I do however strive to find the truth in any situation and what I have been hearing about cryptocurrencies, from people who should know better, has left me scratching my head.
As I stated in a previous post, cryptocurrencies are a commodity, created out of the virtual world that has grown out of our increasingly integrated civilization. An integration that has been facilitated by information technology and the growing quantity of data being produced by us on a daily basis.
Like all commodities it is going through a down period, a so called Bear market. That is not unique to cryptocurrencies and it is not a surprise. The reaction to it on the other hand is something of a surprise. In 2008 the price of oil hit the $180/barrel mark and stayed above $150/barrel for quite some time. It became conventional wisdom that it would stay there for over a decade it not longer. Instead, it collapsed to below $100/ barrel just before COVID-19 hit us in 2020, which promptly caused it to collapse to less than $50/barrel. At the time, you may recall, there were tankers full of the stuff that could not be unloaded because no one wanted it. At no time during that period did anybody state that the oil commodities market was a scam, as a result of the price collapse. There are those who believe it is a scam for other reasons but that is another story.
Yes, cryptocurrencies are not something you can touch, smell and feel, like oil, but neither is data. Like data, cryptocurrencies have an intangible quality to them but that does not take away from the reality of their existence. Remember, cryptocurrency is to data, what oil is to physical material.
So, cryptocurrency and the commodity markets that go along with it will remain. As with other commodities markets a sharp downturn into Bear market territory will clear out of the casual and amateur traders, leaving it to the professionals. Many of them will see the decrease in prices as an opportunity to buy so that they can reap the profits when the market goes up again, which always happens in commodity markets.
Crypto is not a scam, a scheme or a con. It is a virtual commodity traded on a commodity market. Like all other commodities markets the crypto market is subject to Bull and Bear markets and when they happen it is just the normal course of business.
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