July 29, 2021

“Let’s not throw bitcoin away with the water of speculation”

Chronic. Each financial crash is an opportunity to learn “definitive” lessons on the evils of speculation. They are generally intended to be forgotten after a few months, until the next disaster. That of cryptocurrencies, whose total capitalization collapsed by half in the space of a week in mid-May, is no exception to the rule.

A concert of lamentations followed to the well-known tune of “we told you so!” “For some, it is a “Galore trap”, for the others one “Monkey money”. But should we not, faced with these outraged reactions, dare to say, to paraphrase Junie in the face of Nero in the Britannicus de Racine, that bitcoin and its ilk deserve neither excess honor nor this indignity?

Cryptocurrencies and blockchain, the method of storing and transmitting data that allowed their emergence, must be analyzed for what they are: the invention of a new type of asset thanks to a computer programming system, which has been in operation for a decade and is increasingly popular. So let’s not throw bitcoin away with the water of speculation.

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Cryptocurrencies are not without reproach. In addition to a disastrous ecological footprint, they are struggling to become a bargaining chip because of the violent variations in their prices. Last but not least, they facilitate illicit transactions.

They reached $ 5 billion (4.1 billion euros) in 2020, according to Chainalysis, a company specializing in cryptocurrencies. Payments to malware programmers holding personal data hostage to $ 350 million, quadrupling in one year.

A veneer of respectability

The libertarian essence of the phenomenon largely participated in the enthusiasm of the beginnings, pushing thousands of individuals to seek to free themselves from the sovereignty of States linked to their prerogatives to coin money. But, like it or not, the growing integration of cryptocurrencies into the portfolios of a significant portion of large international investors is changing the game.

The arrival on this market of certain well-established banks and funds has succeeded in painting cryptocurrencies with a veneer of respectability. This is probably just the start. Some are worried about the mass of small speculators, who revolve around it. From this point of view, there is nothing new under the sun of financial capitalism. The generation of millennials who invite themselves to the table of this great casino is ultimately hardly different from that of their elders who were cheated in their time on other speculative products. It’s easy to shed crocodile’s tears on these bettors dazzled by the mirage of a fortune capable of being made or undone at the speed of light. But focusing on this aspect of the question, one ends up losing sight of the essential.

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