In 2013, I predicted the December Bitcoin crash a full month in advance. Now I’m here to tell you the entire Bitcoin+crypto industry is a bubble as big as the late 1990’s dotcom bubble. It is going to crash. Investors in crypto stand to lose over 80% of their assets. Hundreds of companies will file for bankruptcy. Some exchanges will ‘gox’, exposing liquidity problems.
Grown men will cry and there will be suicides. And no matter how angry my statements make some of you who are on the Autism spectrum, I will be proven right before the end of this year.
Bubbles, Bubbles, Bubbles
As of today, 13 of the top 15 cryptocurrencies with the highest market capitalizations are bubbles. The only exceptions are IOTA (MIOTA) and Zcash (ZEC), but don’t worry, they will still collapse along with the entire industry, because crypto price movements are often pegged to Bitcoin’s.
What Did We Learn from the Dotcom Bubble? Answer: Nothing
For those of you too young to remember, in the late 1990’s every new tech company promised to be ‘the new Microsoft’. Websites like pet.com received billion dollar valuations. Flooz.com had Whoopi Goldberg promote a digital currency. A new IPO was launched every minute.
In 1999, Mattel bought The Learning Company for $3.5 billion dollars. They sold it in 2001 for less than $30 million, a 99% loss. Today’s abundant crypto ICO’s (Initial Coin Offerings) offer the same phony deals. What kind of a sustainable business model did you really think Potcoin or Dogecoin have?
Not every scam is a Ponzi scheme, but every Ponzi scheme is a scam. People who say things like “Some day, one Bitcoin will be worth a million dollars!” probably don’t know that most cryptocurrencies, including Bitcoin, are programmed to self-destruct.
Bubbles and Super Bubbles
Harvard economist Dambisa Moyo called it right when she wrote How the West Was Lost. For at least two decades, Western investors have been squandering their wealth on dreamy ideals. Our economies have become a giant super bubble built on top of false promises. The crypto craze is an expression of the West’s money cult.
Like Bitcoin, internet companies such as Uber haven’t really invented anything new. Uber, for example, is a service company that merely facilitates a global race to the bottom. Uber has unprofessional drivers drive uninsured cars to transport overcharged passengers. Only Uber’s investors have benefited from that scheme, but at the expense of everyone else.
Bitcoin is no different. What value has Bitcoin added to global society? All Bitcoin has done so far is to redistribute wealth from gullible investors to financial hawks. If that’s not predatory capitalism, it’s definitely financial parasitism. And because of trashed harddrives and forgotten passphrases, more money was lost to Bitcoin than was gained from it.
The sooner the crypto bubble bursts, the better. Some technologies will survive, most will not. I suspect Ripple may become a centralized solution, replacing parts of the global SWIFT transaction network, but Ripple’s XRP currency may not survive. I suspect super-anonymous Zcash will gain popularity among dark markets, pedophiles and governments.
But where do we go from there? After rebellious decentralization, I predict financial systems eventually return to centralized hands. Honestly speaking, on a far-sighted note, only in collapse will Western economies find the kinetic energy to revive themselves.