Bitcoin bashing has been a popular sport among the very rich for quite a while, but this week the usual suspects have considerably upped their game.
These days, it’s no longer enough to call Bitcoin a bad or dangerous investment. If you want to convince the world that Bitcoin is no good, you need to conjure up a string of adjectives so scathing that it makes the Bitcoin sound worse than the plague.
Just yesterday, in an interview with Yahoo Finance, Berkshire Hathaway vice chairman Charles Munger called Bitcoin “anti-social,” “stupid,” “immoral,” and a “turd.” He likened it to organ trading, said people pushing Bitcoin are a “disgrace,” and he somehow managed to squeeze the word “dementia” in there, too.
And I didn’t just make the plague thing up; in an earlier comment, dating Dec. 2017, Munger actually likened Bitcoin to that largely eradicated, extremely infectious disease — though he mercifully didn’t specify whether he’s talking about the pneumonic or the marginally less horrible bubonic form.
Munger’s boss, the CEO of Berkshire Hathaway, billionaire investor Warren Buffett, shares his outlook on Bitcoin. He, too, has recently become creative when it comes to bad-mouthing the popular cryptocurrency. A few days ago, he told CNBC that Bitcoin is probably “rat poison squared.”
I’m not exactly sure how you square rat poison, but it sounds very bad — far worse than regular rat poison. Though, to be completely frank, rat poison is only bad if you ingest it. Perhaps Buffett, who’d built his empire with long-term investments in no-nonsense stocks including Coca-Cola and Apple, is referring to owning a rat poison manufacturing business. That doesn’t sound so bad, unless you’re a rat.
On Monday, Bill Gates himself joined the party, calling Bitcoin a “greater fool theory” type of investment. He added that he would short it if there was an easy way to do it, which was somewhat odd as there is a pretty easy way to short Bitcoin, as noted by investor and cryptocurrency proponent Tyler Winklevoss.
If you’re keeping count, that’s two out of three richest people on the planet. Jeff Bezos, if you have something bad to say about Bitcoin, you had better start working on your derogatory remarks because the bar has been set high.
I get it: Journalists like to ask rich people and famous investors about Bitcoin and they oblige them with answers. But some of these comments are borderline comedy, and are more likely to provoke a few laughs than to sway anyone’s opinion.
Obviously, if you’re looking for quality information on Bitcoin, you probably shouldn’t listen to people who keep setting unrealistic price goals or just keep yelling “HODL,” either (in cryptocurrency lingo, “hodl” means holding on to an asset for dear life and never selling it, no matter the losses). There are plenty of smart, reasonable people in the cryptocurrency space who’ll likely skip the price talk altogether and focus on the technology, which is at the very least promising.
Bitcoin’s price has pulled back somewhat following the remarks from Buffett, Munger and Gates, despite The New York Times‘ report that the New York Stock Exchange’s parent company ICE is looking to launch a Bitcoin trading platform. Historically, however, scathing remarks from famous investors have done little to stifle its price growth. Perhaps what’s needed is stronger words still — or perhaps the crypto crowd doesn’t really care about comments from people who are otherwise more or less uninterested in Bitcoin and cryptocurrencies.
Disclosure: The author of this text owns, or has recently owned, a number of cryptocurrencies, including BTC and ETH .
Warning: mild spoilers for ‘Silicon Valley’ season 5.
From the fertile mind of Bertram Gilfoyle comes yet another pearl of innovation.
Silicon Valley has been known to foray into the real world with its inventions (see Jian-Yang’s Not-Hotdog app).
In a recent episode it was revealed that Satanist coder Gilfoyle mines Bitcoin, but only when it exceeds a certain value. To keep track of when the value of Bitcoin dips below or above this value, Gilfoyle has an alert set up which plays a snippet of “You Suffer” by Napalm Death, a death metal band.
This has inspired an Icelandic website building company called Viska. They have set up an actual website called Bitcoin Volatilitywhich does exactly the same thing. Set a value, and the site will play the same fragment of “You suffer” whenever Bitcoin crosses your threshold.
Now you can be even more like Gilfoyle. Pledge your allegiance to the Church of Satan and you’re almost there!
I’ll say this for venture capitalist Tim Draper: he is fully committed to the gimmick.
Appearing on the Fox News show of sentient bowtie Tucker Carlson, Draper donned a Bitcoin tie and big Bitcoin broach to discuss his plan to divide the state of California up into three separate states: Northern California, Southern California, and
While the “Cal 3” plan is Draper’s big current initiative — he says the proposal has garnered enough signatures to qualify for the November ballot — Draper is a huge proponent of Bitcoin and has been for a while, having scooped up thousands of bitcoin seized from dark web marketplace Silk Road and auctioned off by the U.S. government.
Besides appearing on Carlson’s show, Draper also hosted a 2018 Block (Chain) Party on Thursday night where he came away with rather lofty expectations for the future value of the volatile cryptocurrency.
Serious winds (of change) at our block (chain) party last night. Predicting bitcoin at $25k by 2022.
— Tim Draper (@TimDraper) April 13, 2018
As for the tie, Draper actually has worn a Bitcoin tie before, and he has a penchant for questionable tie choices overall. Most prominent is the tie he used to flash for his previous splitting up California plan, Six Californias.
Maybe once Bitcoin hits that high value again, Tim can afford some slightly more stylish ties.
Bitcoin and Bitcoin Cash’s most fervent supporters are at it again and Twitter has become a bitter battlefield.
The latest victim? The @Bitcoin Twitter account was suspended.
@Bitcoin carries the name of the largest cryptocurrency but, just like Bitcoin.com, frequently issued statements supporting Bitcoin Cash, which split from Bitcoin last year over a disagreement on how the technology should scale. These posts don’t sit well with supporters of the original Bitcoin blockchain, including a group of developers called Bitcoin Core.
The fight between the two groups prompted prominent blockchain developer Jeff Garzik and others, to attribute the suspension to the endless complaints about @Bitcoin that Twitter was likely getting from Bitcoin Core supporters. Twitter didn’t state reasons for the suspension.
Roger Ver, an early Bitcoin evangelist whose work earned him the nick-name of Bitcoin Jesus, has now become a vocal supporter of Bitcoin Cash. Ver, who owns the Bitcoin.com website, tweeted:
The latest skirmish in the war which started with the so-called Bitcoin Cash fork in August, highlights the downside of decentralized organizations and technologies. The lack of a management team means contributors globally can work on improving the technology, which will be implemented only if a majority agrees, but it’s also cause for disagreements and splits.
“The cryptocurrency development is open source, which means disagreements get aired publicly with the additional angle of the forking of a blockchain, where you have to take the entire network with you, and that creates much more tension," said Neeraj Agrawal, a spokesman at blockchain research advocacy Coin Center. “I don’t expect that to change anytime soon.”
Litecoin creator Charlie Lee, a well-known Bitcoin Core supporter, was likely one of the first to alert to the suspension with this tweet on Sunday:
The account now seems to be under new control. The bio now reads "My name is Andrei from Moscow Russia." The private account, which means Tweets aren’t visible to those @Bitcoin doesn’t give permission to follow, has less than 2,000 followers and a background picture that reads "I love you."
Amid a sea of red in financial markets, Bitcoin is still flashing green.
The biggest cryptocurrency climbed as much as 5.4 percent Tuesday to $9,412, the highest since March 7. Bitcoin has gained 20 percent in the past week and 37 percent in April, on track for its best month since its record-breaking December.
Bitcoin is rebounding from its worse start to a year ever, as it slumped more than 50 percent in the first quarter and plunged to as low as $5,922 from almost $20,000 at the end of last year. The cryptocurrency market is gaining as tax-related selling ends and regulatory-related headlines fade, while Wall Street signals increasing interest in the space.
Goldman Sachs Group Inc. said Monday that it hired Justin Schmidt as head of digital asset markets to help clients gain exposure to cryptocurrencies, and cryptocurrency-focused hedge funds have continued to open even amid the market slump earlier this year.
As Bitcoin faces global setbacks and its value responds accordingly, several companies, from Steam to Microsoft, have stopped accepting the currency. But some have held on through it all — the crashes, the rises and falls.
I spoke with executives at companies who continue to allow Bitcoin payments, even as the storm grows rougher, to figure out why they still accept the cryptocurrency. They all sell different products, but there’s one thing they have in common: They don’t do very much business in Bitcoin.
The luxury watch dealer
Danny Govberg, CEO of WatchBox, which claims to be the world’s leading e-commerce platform for pre-owned luxury watches, says that when it comes to cryptocurrency, “I just have a hunch that it’s not going away.” WatchBox has accepted Bitcoin payments since 2014.
“If I’m wrong, okay, so I got educated in an entire structure of cryptocurrency and blockchain,” says Govberg. “If I’m right, then I got educated early on, and was able to adopt it early on.”
For luxury-good companies, Bitcoin transactions are a tool in the toolbox for easing expensive international sales. “When they [international customers] wire us the money and our bank has to convert the money into different currencies, it’s not easy,” Govberg says. “If somebody in the future is in Germany and they want to pay in Bitcoin, they’ll be able to transact that business within a matter of seconds. It’ll come with the blockchain warranty and our bill of sale, everything that customer’s looking for.”
Products on WatchBox can range from a few hundred dollars to over $150,000. Among those sales, Govberg says Bitcoin transactions are “infrequent.”
The tech company
Richard Kirkendall, CEO of domain-name registrar Namecheap, says Bitcoin payments are becoming a necessity for companies that sell products exclusively online. “I believe the core of our customers are very tech-centric, and believe in the ideals of Internet freedom,” Kirkendall says.
Namecheap was one of the earliest adopters of Bitcoin payments. This month is the five-year anniversary of its adoption. “It serves to drive new business by those who would prefer to use this type of currency,” Kirkendall says.
That’s not a huge demographic — only three percent of Namecheap’s transactions are done in Bitcoin — but Kirkendall is sure that it’s growing.
“I believe Bitcoin will be seen more and more as a legitimate method of payment,” he adds, “especially once the technology to bring transaction costs down is implemented in the near future.”
The furniture retailer
Jonathan Johnson, president of Medici Ventures, a blockchain-focused subsidiary of Overstock.com, also believes that the transition to Bitcoin payments is a natural one for an internet-based company. Overstock was the first major online retailer to accept Bitcoin payments in January 2014.
“When we first started accepting Bitcoin, enthusiasts came out in droves,” he said. The novelty gave Overstock quite a bit of Bitcoin revenue: around a quarter of a million dollars in the first three weeks.
Demand for Bitcoin transactions declined sharply after that point, and only makes up about .2% of Overstock’s sales currently. That said, the percentage has been growing since Bitcoin began aggressively appreciating last year.
The average order size of a Bitcoin transaction is more than twice the average order size of other Overstock customers, Johnson said. He believes in Bitcoin as an extension of Overstock’s mission to “let people spend the way they want to spend.”
He’s such a believer, in fact, that he takes part of his salary in Bitcoin. “My bonus was worth a little bit less when I got it, and I think over time it’ll be worth more,” he assured me.
Ettori Rossetti, senior director of marketing and digital innovation at Save the Children, believes that accepting Bitcoin means more younger, tech-savvy people will donate, where they otherwise might not be considering charity. “If we’re in the game in many ways, we make more money and save more kids,” he says.
The international NGO is a cause of choice among gamers and YouTube influencers who, according to Rossetti, overwhelmingly prefer to donate in Bitcoin.
Save the Children entered the Bitcoin market in late 2013, when the currency’s value was in the hundreds of dollars. Since then, it has received “tens of thousands” of dollars in Bitcoin contributions. This isn’t much compared to the organization’s annual revenues of $600 to $700 million dollars, but according to Rossetti, it only takes about ten dollars to reach a child in a natural disaster.
Is Bitcoin a bubble? Rossetti doesn’t care — it’s what the people want. “I’m not in the business of calling winners or losers,” he says. “Whether it’s a bubble or not, I’m not gonna play favorites.”
Research seems to agree that over time, it’s gotten easier to spend Bitcoin. Consumers spent an average of $190.2 million in Bitcoin in 2017, compared to $9.8 million per month in 2013. And after Square started accepting Bitcoin, a study found 60% of its U.S. merchants willing accept Bitcoin payments. A Bloomberg analyst called this “surprising, especially amid Bitcoin’s elevated volatility.”
However, a report from Morgan Stanley last year revealed that Bitcoin acceptance is at an all-time low, and getting lower. “Bitcoin owners are reluctant to use the cryptocurrency given its rate of appreciation, more evidence that bitcoin is more asset than currency,” one of the analysts wrote.
It seems that the businesses that still accept Bitcoin, even its earliest adopters, are those who are playing the long game. When Bitcoin makes up a small percentage of profits, rather than an integral aspect of a business model, its value is clear as a symbolic gesture to young, techy customers, and as a foot in the door in case cryptocurrency blows up. Meanwhile, high transaction fees are infrequent enough not to be prohibitive, and the hit to profits from depreciation is relatively small.
When Bitcoin becomes more than that, it’s a problem.
The ones who left
Leading online payment company Stripe stopped accepting Bitcoin payments in late January. The company attributed its decision to the volatility in Bitcoin’s price. “Transaction confirmation times have risen substantially; this, in turn, has led to an increase in the failure rate of transactions denominated in fiat currencies,” Tom Karlo wrote in a blog post. “For a regular Bitcoin transaction, a fee of tens of U.S. dollars is common, making Bitcoin transactions about as expensive as bank wires,” he added.
Steam halted Bitcoin transactions for similar reasons in December, citing difficulty calculating transaction costs in addition to the currency’s overall volatility. Valve engineer Kurtis Chinn wrote in a blog post that because the value of Bitcoin is only guaranteed for a certain period of time, the amount of Bitcoin needed to purchase a game could change before Steam was able to update the game’s price, potentially losing the company money.
Steam and Stripe has not released how many of their transactions were in Bitcoin.
Bitcoin transaction fees are currently under a dollar per transaction, but peaked at $37 in late December. BitPay, the transaction platform that many companies, including WatchBox and Namecheap use to accept currencies, instituted a $5 minimum transaction fee that same month and warned users that “Many invoice payments under $100 may still be uneconomical for bitcoin purchasers due to high bitcoin network fees.”
Until Bitcoin is shown to be viable as a currency, rather than just an asset, it will be very difficult for these companies to comprise anything more than a vocal minority. Nevertheless, in a world where interest in Bitcoin is growing, and it’s impossible to predict what will come next, a small number of Bitcoin sales can serve as a large show of support for cryptocurrency on principle, and as a low-risk, but potentially high-reward gamble.
The greatest bubble in history is popping, according to Bank of America Corp.
The cryptocurrency is tracking the downfalls of the other massive asset-price bubbles in history less than one year out from its record, analysts lead by Chief Investment Strategist Michael Hartnett wrote in a note Sunday.
The cryptocurrency has fallen more than 65 percent since peaking in December at $19,511. Bitcoin rose 2.2 percent to $6,750 on Monday.