The speed with which cryptocurrencies have collapsed has been alarming. Bitcoin, the world's largest cryptocurrency by market capitalization, is still bleeding after its price fell below $20,000 on Monday. In addition to Bitcoin, other cryptocurrencies were not spared, with Dogecoin, Cardano, Solana and Polkadot dropping between 12 and 14 percent, while Monero and Zcash fell by 16 percent.
Bitcoin fell below the $18,000 mark on June 19, hitting a low of $17,601, its lowest price since December 2020. Bitcoin has fallen for 11 consecutive days, including June 19, marking its longest losing streak since its birth in 2009.
Bitcoin peaked at more than $68,000 in 2021, and analysts believe the $20,000 price is a watershed below which bitcoin could continue to fall.
The second most valuable cryptocurrency, Ether, also fell below $1,000 on Monday, falling nearly 11% to $975.24, its lowest level since January 2021. Both bellwethers of the cryptocurrency market are now down about 70% from their all-time highs set in early November.
Bitcoin's plunge was linked to some bad news for cryptocurrency-related businesses last week. Celcius Networks, a cryptocurrency lender, said it will suspend withdrawals and money transfers in June. Some related companies have also begun to lay off workers.
But others argue that cryptocurrencies themselves are a scam. One explanation, perhaps coincidentally, is that people like Mr. Krugman, who won the Nobel Prize in economics in 2008, wrote in a Column in The New York Times that people who think cryptocurrencies are mostly "Ponzi schemes," understand that when they can't attract new knuckleheads, it's the time to crash.
But Kruman points out that there's a more fundamental problem behind the cryptocurrency crash: Those who claim cryptocurrencies are "digital gold" as a hedge against fiat currency inflation have both a complete misunderstanding of how the fiat currency system works and a lack of understanding of what has driven gold up in the past. The sharp fall in bitcoin prices caused by soaring inflation was expected; It is surprising that it should fall so miserably.
Bill Gates has also previously said that he doesn't invest in any cryptocurrencies because he likes to invest in things that have a "valuable output" and cryptocurrencies "don't contribute to society."
Plus, Buffett and Charlie. Mr. Munger has expressed distrust of bitcoin in the past. Buffett elaborated on why he doesn't believe bitcoin has value, comparing it to other things that generate similar value.
"If you say... Pay us $25 billion for one percent of all farmland in the United States, and I'll write you a check this afternoon." "For $25 billion, I now own 1% of the farmland. If you give me 1% of all the apartments in the country, and you want $25 billion, I'll write you a check. It's easy. If you told me you had all the bitcoin in the world and you sold it to me for $25, I wouldn't take it, because what would I do with it? I had to sell it back to you anyway. It doesn't do anything. The apartment is used to generate rent, and the farm is used to produce food."
Munger, for his part, said: "In my life, I try to avoid things that are stupid, evil, that make me look bad in front of other people -- and bitcoin does all three." "It's silly because it could still go to zero. It's evil because it breaks the Federal Reserve system..."
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