In Bitcoin we trust ... while it's going up

​Bitcoin’s unprecedented, 30-fold, price rise in little more than a year has captured wider attention.

Go to the profile of Paul Lewis
Dec 04, 2017
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Nasdaq and other US exchanges even plan to offer trading in cryptocurrency derivatives. As companies try to understand cryptocurrencies and how the underlying technology, Blockchain, might change their industry, FT | IE Corporate Learning Alliance has marshalled its own wide-ranging expertise to explain developments to its clients. Indeed, as noted in the FT’s European Business Schools special report: ‘More institutions would like to teach it now, but it’s a question of having a professor around to do it.’

Those looking for some perspective might start with the FT’s Big Read, Bitcoin: an investment mania for the fake news era. Critics point out that Bitcoin has no income stream and lacks a fundamental basis for valuation, making it more akin to a precious metal than a currency. It also resembles a classic bubble: an invention created during a period of loose monetary policy whose benefits lie in the distant future. Nevertheless, though some early adopters have cashed out with life-changing returns, demand remains as high as ever. This is particularly the case among those who have lost trust in—or in the case of money launderers who wish to circumvent—governments and banks, prompting calls from respected economists, politicians and investors to ban it.

Banning it misses the point. As the FT’s Capital Markets editor Miles Johnson explains: ‘Bitcoin is a faith-based financial asset for a populist era.’ Like other bubbles, Bitcoin reflects its time—in this case, ‘a collapse in confidence in traditional forms of authority and a disdain for experts.’ Indeed, ‘any criticism of bitcoin is greeted by this cohort as inherently corrupt in its motivations, while any alternative opinions are used as evidence that merely confirms existing beliefs.’ In years to come, Bitcoin might be viewed as ‘a speculative barometer of the political forces that are shaping our times.’

Go to the profile of Paul Lewis

Paul Lewis

Editorial director, Headspring

Paul Lewis is a writer and editor, specialising in business, management, economics and politics.