The ancient Egyptians made pyramids to last forever. Wall Street’s pyramid schemes aren’t nearly as durable.Bitcoin, while not officially a product of traditional Wall Street, is a pyramid scheme. A fraud. But it is best described as a “confidence game.”
I’ve been calling it a “bitcon” for a long time. And now the pyramid seems to be collapsing because fewer and fewer people have confidence that the price of this inherently worthless “cryptocurrency” is going to continue to rise.
I’ve just repeated some of the comments I made about bitcoin (and you could include other cryptocurrencies here) for years. But I’ve been especially vocal since early this year when bitcoin was reaching nearly $20,000 in price and even staid Wall Street firms were being lured to this “investment.”
Here’s what I said about the crypto in a column on Jan. 4 that made predictions for the new year.
“The fact that anyone even has to discuss the fate of this and other so-called cryptocurrencies shows just how crazy the world has become. Bitcoin — or bitcon — is a confidence game. A scam. It will exist and move higher for as long as extremely wealthy people are willing to prop it up in hope that suckers remain confident that bitcoin has some value,” I wrote.
I predicted a number of times that bitcoin would eventually be worth $0.On the day that column was published, bitcoin was selling for $15,144. That was below the $19,650 peak it reached on Dec. 16, 2017.
Over this past weekend, the price had fallen to just $3,600, which is still $3,600 too much.Since its peak, bitcoin has lost about $700 billion in value. Think of it this way: The early participants in this pyramid have made a lot of money, but other people have lost $700 billion of their money in less than a year.