Jim Rickards is the editor of Strategic Intelligence and the author of Currency Wars: The Making of the Next Global Crisis. He believes gold can go to $10,000 an ounce but he is much more skeptical about bitcoin. Rickards doesn’t trust the bitcoin price action and doesn’t believe the cryptocurrency will fare well in a financial crisis.
Personally I’m very skeptical of bitcoin, I know where the price action is. It’s, you know, going up about 10% a day at this point. Although bitcoin could go up to 20,000, it can go to 30,000. It’s on it’s way to zero — somewhere between zero and 200. It’s a utility token for criminals, terrorists, money launderers, tax evaders — they’ll always find some use for it. So it might not go all the way to zero. It’s clearly a bubble — it looks like the second biggest bubble in history after tulip mania. Although at the rate it’s going it will pass tulip mania, you know, in a matter of days. [It’s] bigger than the south sea bubble, bigger than the Mississippi bubble, New York’s — the Dow Jones in 1929, the Nikkei in 1989 — name your bubble, it’s bigger than all of them.
Number one, there’s pretty good evidence that there’s a lot of fraud going on.
Look, every market in the world — gold, silver, stocks, bonds, Libor — every market, you name it. They’ve all been searching to manipulation. That’s why we have all these regulators; that’s why we have the SEC; that’s why the stock exchange is regulated, etc. Are we supposed to believe that bitcoin is the only market in history that’s not manipulated? That’s nonsense, of course it is.
In fact, the fact that it’s unregulated is a magnet for all the manipulators.
It’s just you and me painting the tape. It’s the oldest, you know, the oldest fraud in the book. It’s call a ramp or, you know, whatever you want to call it. But the point is that brings in the suckers from the sidelines and then they buy it.
Right now they’re using — bitcoin miners — every year are using as much electricity as the country of Nigeria — a country of 90 million people. Before long will be using as much as Japan, third largest economy in the world. That’s not going to happen. You can say that, that’s the simple extrapolation, but there’s no way the bitcoin industry is going to be allowed to use as much electricity as the country of Japan. But that’s how much you need to mine the bitcoin. So they’re going to hit a wall, in terms of total bitcoin output. At that point the miners have no incentive to mine. So who’s going to validate the blockchain? Are they going to charge a fee? Well fine, that sounds like Wells Fargo. That’s what banks do.
Eulogy made by Jim Rickards
