Bitcoin: A blip or a reckoning?
In April this year, Warren Buffet said he would not pay $25 for all the bitcoin in the world. “Because what would I do with it? I’ll have to sell it back to you one way or another. It isn’t going to do anything.”
Retail investors and the celebrity influencers encouraging their foray into this new market were deaf to such sentiment as bitcoin soared in late 2020 onwards. From September that year, the number of people worldwide holding digital assets increased from 100 million to 300 million in 2021.
However, digital currency’s more recent investors are feeling substantially poorer today. Bitcoin has now lost 69% of its value since its November 2021 peak. The entire crypto market has shed 57% of its value since the start of the year.
Still, advocates point towards longer-term trends. The dotcom bubble of the late 1990s culminated in a spectacular collapse that wiped over $5 trillion of value from an oversaturated market. However, the few companies that survived came out stronger. Michael Sonnenshein expects a similar consolidation to happen in crypto markets. He asks that we
“look at the perspective of where bitcoin has come from, where it has the potential to go. We are not seeing any slowdown of development or adoption of this asset”.
Meanwhile, crypto’s detractors draw historical comparisons between it and tulip bulb mania in 1630s Holland. At the height of that trend, tulip bulbs sold for the same price as a town house in Amsterdam. Just 2 years later, they were virtually worthless. Arch-crypto critic, Nouriel Roubini, believes this bubble is even worse. “At least tulips had some utility”, he said.
For more information on Michael, Nouriel, or Chartwell’s other recommendations, please see below:
CEO of Grayscale Investments, the world’s largest digital currency asset manager.
Executive Diector of the Blockchain Association, the voice of the crypto industry.
Co-founder of the Ethereum blockchain platform.
‘Dr Doom’ and renowned crypto critic.
If you are interested in booking any of the above speakers, please get in touch.