Cryptomoney: physical gold is outdated!

Cryptomoney: physical gold is outdated!

Bitcoin pushed the boundaries again this weekend and reached a highly symbolic milestone. In a context that borders on a vast hoax, underlines Philippe Béchade.

It’s an event that’s going to make a lot of ink flow: the value of Bitcoin, which reached $58,000, yesterday exceeded that of a gold ingot (and more incidentally of a Tesla Model-Y).

Not surprisingly, cryptotraders’ forums were loudly delighted to see their bet that digital gold would surpass physical gold, the very gold held by central banks as one of the guarantees of fiat money, come true. They see this as the ultimate proof of the discrediting of these institutions and their issues of Monopoly banknotes.

Thousands of small investors – soon to become very large – are now coming to proclaim their faith in Bitcoin, the « currency of the future », even though each transaction in BTC uses as much energy as 500,000 purchase transactions processed by Visa or Mastercard. A waste of energy and a carbon footprint to make every environmental activist scream with rage, simply for having made a speculative round trip that, for the moment, is a winner.

That’s all there is to it on WallStreetBets, a trading platform that brings together communities of (often novice) traders who rely on leaders far more experienced than themselves, probably seasoned professionals working for large hedge funds, whose speculative performance and « lexical field » are authoritative.

The advent of real trading putschists

The advent of real trading putschists

Beyond the narrative that fires the imagination, the state of mind betrays a mixture of puerility and the temptation of generational rupture, against a backdrop of rejection of the principles and precepts taught by the « old » such as « past gains do not guarantee future gains », « don’t put all your eggs in one basket » and others « don’t get exhilarated, because 90% of beginners who think they’re great end up losing their shirt ». Simply put, the principles revealed by the vocabulary of the new generation of traders are the antithesis of the rules of prudence and the lexicon below is particularly revealing of this « risk everything » mindset, including the « YOLO », the « TTM » (to the moon) and the « Stonks ».

Influencers subjugate neophytes by praising this new Eldorado of the world of cryptocurrency, explaining that it is a technical revolution, that it is « mined » by geothermal energy in Iceland or hydrogen (in their dreams), that it is good for the planet (which is 95% false) and that it will soon be labeled by Greta Thunberg. In short, at $1 a unit (100,000 times the cost of production for the clever guy who perfumes the networks) the Ponzicoin they found is a gift: there’s 1,000% profit to be made on this token by the end of the year!

While waiting for such a miracle, 90% of the « miners » can proudly display their electricity bill as well as the bills for the graphics cards and processors they had to implement to join the club of the pioneers of the blockchain. And overall, mastering the theoretical bases of this one and being able to extract a « proof of work » or a « proof of interest » is about as useful as knowing in detail how « ABS » braking works (the computer, the hydraulic circuits, the degree of abrasion of the brake pads) or that of power steering (when you make a niche) for 99.99% of the world’s drivers.

However, the comparison stops there because the automotive industry only needs a handful of ABS management software suppliers, whereas there are now as many cryptomoney companies as there are listed companies on both sides of the Atlantic.

Did you say « scarcity »?

Philippe Béchade

Editor-in-chief of « La Bourse au Quotidien » and the « Béchade confidentiel » newsletter, Philippe Béchade has been writing macroeconomic and stock market columns since 2002. He is also the author of an essay, « Fake News », which serves as a handbook for re-information on financial markets. Trained as a trader and technical analyst, he was one of the very first traders and trainers on futures markets in France as early as 1986. A regular contributor to BFM Business since 1995, he is a contrarian editor and analyst, and strives to promote a humanistic, impertinent and forward-looking analysis of economic and geopolitical news.

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Cryptomoney: physical gold is outdated!
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