Bitcoin Obituaries Pile Up

The Oracle of Omaha continues his skepticism of all things crypto, telling CNBC “In terms of cryptocurrencies, generally, I can say almost with certainty that they will come to a bad ending,” Buffett said, noting that he didn’t understand Bitcoin and other blockchain-based digital assets. “Now, when it happens or how, or anything else, I don’t know.”

Buffett’s comments on Tout TV did nothing to chill the enthusiasm for Bitcoin, et al. He said he’s not short or long at the moment, but would happily buy 5-year puts on all 1,350+ of the Sons of Satoshi.

Bitcoin has been pronounced dead 235 times (as I write).  Who's counting? 99bitcoins.com, that’s who. Last year saw 109 bitcoin obituaries, and there are 6 already this year (again, as I write).

With a 1300% jump in exchange value, the bitcoin money supply now ranks 19th in the world. Rest assured, government central banks, the inventors of Quantitative Easing (QE): China, European Union, Japan and the U.S. have a more than a sizable head start, making them hard to catch.

The latest Grant’s Interest Rate Observer writes,

Maybe the crypto creators have subliminally imbibed the techniques of QE. Watching the central banks conjure trillions without even running up their electricity bill, the ICO promoters are trying the same. It is brilliant satire,  but the satirical product isn’t money.

Cryptocurrencies have always claimed to be money, the outgrowth of Hayek’s competing private currency dreams.  However, currencies don’t pop by 1300% in value.  Grant’s contends,

So cryptos are not money. They are rather what has come from a consensual suspension of the laws against private-sector counterfeiting. Society has somehow arrived at a moment in which you--whoever you are--can create a coin and try to sell it. Many are buying it, whatever it is.

According to Grant’s, the money of the past, “the monetary asset of choice come the future time of trouble will be that old standby, gold.”