WINDERMERE, LAKE DISTRICT – “Is this a nightmare?” asks a dear reader…
I’ve received some wild responses to my recent letters. Some read like a fever dream:
Bitcoin is (in my opinion) an Illusion, caused by drinking too much alcohol or finding Class 3 drugs in your system… without going into my many (is it only me?) questions is this not a classic bubble? I am sure that the world-wide hype and the ‘limited’ issue of Bitcoin will allow those hoping to make a £500 investment turn into £100,000 will drag in all the poor and vulnerable into losing what they probably didn’t have before. If I said I would give you something for nothing, would you believe me?
One of the strong arguments to drop the gold standard was that the supply of gold couldn’t support the economic expansion needed in the different world economies…. Well re-clock gold at $10,000 an oz and we are back in the real world.
Crypto’s are going into orbit…. but gold/silver is in my back pocket and not in cyber space.
The case has been made for bitcoin being in a “classic bubble” for many years now – almost as long as I’ve been aware of the asset’s existence. To be clear, the journalists and market commentators who have been claiming that BTC is nothing but “a classic bubble” through the years could still be proven right… but I don’t believe that is the case.
Bitcoin may well be overvalued, but to dismiss this as a classic bubble like the tulip mania is simply neither accurate nor helpful. What will change the state of play? What catalyst could break this trend? And what indicators should we be looking at to see if such a change has occurred? These are questions which would be more worthwhile.
For example – if we look further out through the digital asset ecosystem, I think the NFT (non-fungible token) market is well into bubble territory (and/or a money launderers paradise). But how long will it continue providing massive gains for those willing to brave it? I simply don’t know – perhaps there’re fortunes aplenty still waiting to be minted within it. I could say that with few exceptions, that this market is no place for a long-term investor. But anybody participating or even looking at that market likely already knows that, so me standing on a pedestal to declare it offers little value.
I’m certainly glad I didn’t believe the crowing of mainstream financial types that BTC is nothing but a bubble over the years, for I’d have missed out on one of the greatest trades in human history. Even if bitcoin is a massive bubble and collapses to zero from here, it would still have been in my best interest to not pay attention to people calling it a bubble. There’s a lesson in there about the value of information that I’m determined to learn.
As for gold and silver… well, if you’ve been reading this letter for a while, you’ll know precious metals are close to my heart. And we’ve an event coming up that you’re really gonna love – stay tuned.
Dead and buried – Satoshi and his hoard
On Wednesday, I flippantly made the case for Osama Bin Laden being the true identity of Satoshi Nakamoto, the creator of bitcoin.
I had come upon the idea when I realised that Satoshi vanished at almost exactly the same time Bin Laden was executed, and then realised he and Satoshi had a few other things in common too.
I was not being serious – it was a thought exercise. But some readers were not pleased…
You are missing a whole lot of dots. Your conspiracy theory is most bizarre and far-fetched. For one, why would he/they choose a name like Satoshi Nakamoto, not something Islamic-related? It shows your ignorance of Islam as religion and culture. Second, where did Bin Laden learn code like that, at his age?
I freely admit, my theory is most bizarre and far-fetched… almost as bizarre and far-fetched as the claim that an Islamic terrorist, seeking to conceal their identity on the internet, would be incapable of using a pseudonym which isn’t “Islamic-related”.
Junaid Hussain, former head of hacking and propaganda for ISIS begs to differ – or at least, he would if he hadn’t been evaporated in a drone strike in 2015. The 21-year-old from Birmingham ran by the handle “TriCk” in his online exploits – he must not have received the memo that all aliases must be kept “on-brand”…
And I dare say that had Bin Laden taken an interest in coding, he would have done so via the internet – just like everyone else. Was Osama an old dog with no space for new tricks in his noggin? Perhaps we should ask the US Navy SEALs – after all, they got to take a look inside.
Meanwhile, other readers were a little more open to my speculation:
I think that you are onto something about Satoshi Nakamoto. No not that he was Osama Bin Laden, but that he is dead and/or his private keys are lost.
There is an alternative, perhaps even more fanciful, that someone or some country is playing the (very) long game and when the time is right will release all bitcoin to devastating effect. Who would gain from this I don’t know. Just a thought.
We’ll explore the more likely candidates for the “real” Satoshi next week. (I have two in mind – both of them dead), but first off I’d like to know your theories on bitcoin’s creator. Who do you think created this trillion-dollar asset, and £45 billion in value for themselves, and then left it all behind? I want to know – you can tell me who you suspect here.
Wishing you a good weekend.
Editor, Capital & Conflict
Category: Investing in Bitcoin