(Bloomberg) — It may be ill-advised to fight the bitcoin rally, even if conventional asset-price metrics suggest the cryptocurrency has little or no inherent value. The “bubble” may not last forever but it can potentially sustain for many years due to the strength of its cult.
- The most compelling bullish argument for bitcoin is that it’s becoming a modern religion. Skeptics shouldn’t underestimate the power of true believers
- Numerous signs support this theory, proposed by Bloomberg’s Joe Weisenthal. Just a few of the examples he gave are the revered status of the mysterious founder whom nobody has been able to definitively identify, the mystical holy text of the white paper, the “disciples” on the initial mailing list who interacted with Satoshi Nakamoto, and the iconography
- At first glance, it may seem crazy to ascribe such traits to a speculative financial instrument, but it would be ignorant to overlook the possibility of religion evolving in this modern age of science, technology and capitalism
- The book “Sapiens: A Brief History of Humankind,” by Yuval Noah Harari, argues that our power to believe common myths is the critical reason why our species dominates the planet, as it enables large numbers of strangers to cooperate. Certainly, human history shows religious faiths have incredible power over people, society and culture — and hence real value
- Bitcoin might never become a serious asset class for non-believers, nor ever be a viable and efficient currency, but it can still retain value through its quasi-religious nature. Holding it as an investment may be a matter of faith, but that’s precisely why financially logical economic arguments are an inappropriate framework if trying to challenge it
- NOTE Mark Cudmore is a macro strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice
–With assistance from Joe Weisenthal. To contact the reporter on this story: Mark Cudmore in Singapore at firstname.lastname@example.org To contact the editors responsible for this story: Madeleine Lim at email@example.com Nick Gentle, Mark Cudmore