Bitcoin has no intrinsic value and will collapse, says the Financial Times

The renowned Financial Times (FT) newspaper took a critical look at Bitcoin’s recent rise, comparing it to a “déjà vu” and predicting a possible collapse.

The paper notes that Bitcoin’s price more than doubled in 2023, from $15,500 in January to $42,000 in December, with the rise sparking a wave of optimism in the sector and predictions that the cryptocurrency could hit $100,000 by the end of 2024 transcend. and perhaps reach $750,000 by 2026.

However, the FT expresses skepticism about the sustainability of this rally, arguing that Bitcoin, unlike other assets, lacks intrinsic value and is not backed by any tangible entity.

While gold is also often compared to Bitcoin, the FT emphasizes that the precious metal has historically been seen as a reliable store of value and hedge in times of economic uncertainty.

“Unlike other assets, Bitcoin has no intrinsic value and is not backed by anything.” says the article.

The collapse will come again

The publication also suggests that Bitcoin’s recent rally was driven more by speculation than solid fundamentals. The paper describes this as an example of the “dumbest theory”an investment principle that suggests you can profit from an overvalued asset as long as there is someone willing to pay even more for it.

This theory implies that the value of an asset can continue to rise as long as there is demand for it, regardless of its fundamental value.

Crypto bulls, on the other hand, argue that the return of risk appetite in financial markets, the resolution of high-profile criminal cases in the market, and the expected approval of Bitcoin ETFs in the US are indicators of a market that is more mature and robust. .

However, the FT emphasizes that the legal and regulatory challenges to cryptocurrency are far from over. Furthermore, the inherent volatility of cryptocurrencies remains a major problem, with private cryptocurrency funds trading at exorbitant values ​​relative to their underlying value.

The FT also says that while investors can make short-term gains, the long-term rally is inherently risky and unsustainable. The paper ends the article by saying that Bitcoin has suffered a dramatic collapse before and suggests that such a scenario will repeat itself.

“All you need to profit from an investment is to find someone foolish enough to buy the asset at an even higher price. This will continue until it doesn’t happen anymore. Bitcoin has collapsed before; will definitely do that again.”