For the non bilingual folks

"Bitcoin is not a currency, but a speculative investment"

They can’t come up with anything interesting to say so they just repeat themselves. Saw a Dutch “documentary” about El Salvador the other day, most people are constantly gaslight about anything related to Bitcoin.

For the interested folks, as it looks like it's also paywalled, have a laugh:

“KOEN SCHOORS

Professor of economics at Ghent University

Today at 06:35

Bitcoin is not a means of payment. It is also not possible to save or grant credit with it. So why invest in bona fide financial companies like Blackrock in derivatives?

We normally expect money to be able to pay, calculate, save and grant credit quickly and efficiently. Therefore, bitcoin is not money. People who believe that you can pay freely and smoothly with a bitcoin live in an illusion.

The author : Koen Schoors is professor of economics at Ghent University.

The Issue : Few have a good eye for bitcoin's reliability. Yet financial giants such as Blackrock invest in derivatives of it.

The conclusion : Bitcoin's value is largely unrelated to stock and bond prices and commodity prices. That makes the crypto coin a great addition for balancing a portfolio.

Although the individual transaction costs for a user are low, the social transaction costs are high. The required computer time and associated emissions are enormous. In addition, bitcoin paves a financial highway for transactions that cannot bear the light of day, such as drug, arms and human trafficking, money laundering, extortion, embezzlement and fraud. In other words, the potential negative external effects are incalculable. That is why most governments will never accept bitcoin as an official payment currency.

Interest from institutional investors is pushing bitcoin above $30,000

As a unit of account, the value of bitcoin is too unstable. Citizens of countries with unstable currencies usually charge in more stable foreign currencies and their governments often use that foreign currency as their official currency. The US dollar is also the official currency of Ecuador, El Salvador, the Marshall Islands, Micronesia, Palau, East Timor and Zimbabwe. In addition, eleven countries have a currency board with the US dollar, where the value of the currency is equated with the more stable dollar and monetary policy depends entirely on dollar reserves.

Kosovo and Montenegro use the Euro as their official currency, although they are not members of the Eurozone. Bosnia Herzegovina has a currency board with mainly the euro. Bulgaria, Estonia and Lithuania also used euro coin boards to stabilize their economies.

As a means of savings, bitcoin has no future. Risk-averse savers demand predictability and liquidity, while the value of Bitcoin is notoriously unpredictable and illiquid. The unreliability of some existing bitcoin platforms and the recent fraud scandals in which many savers lost their money have given confidence in bitcoin a serious blow.

Moreover, savers sometimes cannot convert their bitcoins to real coins if the value of the bitcoin drops sharply and it therefore just matters. This inconvertibility is a huge obstacle to bitcoin's breakthrough as a widely accepted means of savings. Because bitcoin is not a good means of payment, unit of account or savings, it certainly makes no sense to see the currency as a means of credit.

Blackrock

Despite the explicit ambition in the name, bitcoin is therefore unable to properly fulfill the functions of money. But why then invest in derivatives of bona fide financial companies? Blackrock asked the US regulator SEC for approval for a Bitcoin ETF. An Exchange-Traded Fund or a tracker is a product traded and listed on financial markets whose value depends entirely on an underlying asset, in this case Bitcoin.

Other financial players, such as Invesco, WisdomTree, Bitwise, Ark Investment Management and Valkyrie, have done so before, were rejected by the SEC, and submitted an amended ETF request. Fidelity is also active in bitcoin-based derivatives and allows employees to invest part of their pension in it.

The reason is that bitcoin has developed as an interesting speculative alternative for investors. If you want to build a well-diversified and efficient portfolio, you are looking for assets whose return and volatility are as independent as possible from those of other assets.

The completely irregular and unpredictable price behavior of bitcoin is also its greatest asset in an investment portfolio.

And let bitcoin now meet those requirements excellently. In times of crisis, value appears to be largely unrelated to stock and bond prices and even commodity prices such as oil or rare earths. In this way, the completely irregular and unpredictable price behavior of bitcoin is at the same time its greatest asset.

That is precisely why bitcoin seems ideally suited to diversify portfolios against the impact of unexpected shocks on the rest of the portfolio. In this sense, bitcoin complements gold in balancing the value of portfolios, as the correlation between bitcoin and gold is also far from perfect.

So asset managers are interested in Bitcoin ETFs because they allow you to integrate Bitcoin into portfolios without the technical, regulatory and reputational drawbacks of Bitcoin itself. Assuming, of course, that bitcoin itself remains worth something. Because the coin has no underlying value, it is not certain whether bitcoin ETFs will have value in the future. A worthless asset is also not correlated with other assets, but that does not make it a good investment. So wait and see if it will really work.”