Does Bitcoin crossing $100,000 finally prove that it is a good investment? Should you invest in it now? The narrative has become that if Bitcoin can survive disasters, it must be fundamentally sound—a logical fallacy of stunning proportions
Dhirendra Kumar
CEO, Value Research
Bitcoin has crossed the $100,000 mark, and the cryptocurrency faithful are celebrating what they see as vindication. People like me, who have now spent years speaking against Bitcoin, should now shut up and follow the new god. Social media is awash with proclamations of Bitcoin’s inevitability and retrospective calculations of how much money doubters have ‘lost’ by not buying in earlier. The psychological impact of this round number will draw in a fresh wave of new investors and make this an especially dangerous moment for people’s savings.
#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;} However, Bitcoin sceptics like me stand steadfast. This price milestone changes nothing about Bitcoin’s fundamental nature. It remains an entirely speculative instrument with no underlying value as it has always been. When something has no inherent worth, no price—$10 or $10 million— can be considered correct or incorrect. The price is whatever the next person can be convinced to pay. However, human psychology is deeply affected by round numbers and milestones, so this particular event is worth examining carefully.
I’ve written about this earlier in the wake of the FTX scam, but we are witnessing a new phase in the legitimisation of speculation. Wall Street, which Bitcoin was supposedly created to circumvent, has become its greatest enabler. The American financial establishment’s embrace of Bitcoin through ETFs and other products has created a face of respectability around what remains, at its core, a vehicle for speculation and ransomware. This institutional involvement makes the bubble more dangerous, not less so, by creating the illusion that this is a safe financial asset.
The cryptocurrency animal has shown resilience. It has survived frauds, exchange collapses, criminal investigations, and regulatory crackdowns. However, rather than these failures serving as warnings, they have perversely been transformed into evidence of Bitcoin’s strength. The narrative has become that if Bitcoin can survive such disasters, it must be fundamentally sound— a logical fallacy of stunning proportions.
For Indian investors, this moment carries particular risks. While our government’s taxation measures have effectively curtailed much of the crypto speculation we saw in previous years, the psychological pull of a $100,000 Bitcoin price may tempt people to circumvent these protections. The narrative of ‘missing out’ on easy wealth is powerful, especially when accompanied by social media posts showing seemingly endless price rises and celebrations of newly minted crypto millionaires.
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It’s worth noting that every speculative bubble in history has created compelling narratives about why ‘this time is different’. During the dot-com bubble, people spoke about a ‘new economy’ that had transcended traditional business metrics. During the 2008 financial crisis, we heard that property prices could never fall nationally. Today, crypto enthusiasts speak of Bitcoin as ‘digital gold’ and a hedge against inflation despite evidence contradicting both claims.
The truth remains unchanged: Bitcoin produces nothing, earns nothing, and serves no practical purpose that existing financial systems cannot better serve. Its price rises solely because of speculative buying, fuelled by the belief that future buyers will pay even more. This is the very definition of a bubble, and the fact that this bubble has grown to encompass a $100,000 price tag makes it more, not less, dangerous.
What bothers me is that this milestone will be used to market Bitcoin to the next wave of potential investors. The price rise will be presented as proof of concept, the institutional involvement as validation, and bigger and bigger round numbers as destiny. The sophisticated marketing machinery of the crypto industry will deploy this narrative to target those who can least afford to gamble their savings on speculative assets.
For sensible investors, the path forward is obvious. Real wealth is created by owning productive assets—companies that develop valuable products and services, generate profits and earn real returns. The fact that a speculative bubble has reached new heights doesn’t change this fundamental truth. Missing out on a bubble is infinitely preferable to being caught when it eventually bursts, as all bubbles inevitably do.
The question isn’t whether you could have made money by buying Bitcoin earlier. In any bubble, early speculators always profit. The question is whether, knowing what you know about its fundamental nature, you should put your money into it now. The answer to that question hasn’t changed because of the price.
THE AUTHOR IS CEO, VALUE RESEARCH #sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;} (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
This story originally appeared on: India Times - Author:Faqs of Insurances
