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What’s Behind the Bitcoin Price Surge? Vibes, Mostly

The price of bitcoin has climbed to a new all-time high. But assigning the cryptocurrency a value is anything but trivial.

Yet they capture a belief among hardliners that the economic architecture of the Bitcoin system—whereby a fixed supply of 21 million coins and predetermined schedule of release is hardcoded into the software—will inevitably propel the price upwards over time. “I think that is a bunch of economic nonsense.” Because the supply of bitcoin will shrink steadily over time as people lose access to irrecoverable wallets, Green argues, it cannot support a system of credit, because the cost of borrowing will eventually rise to a point that almost no one can afford. In approving the new bitcoin funds, says Green, regulators have incentivized financial institutions for whom the ETFs represent a new source of revenue to “spend tons of money on marketing to drive demand,” and in turn disincentivized any emphasis on deficiencies in the logic of bitcoinomics.

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