Whoopsie daisy Bitcoin!

Sure, the stock market is melting down after the US declared a global trade war. But have you considered that crypto is also melting down?

Starting around April 6, the Bitcoin price fell off a cliff — and is sitting at $78,800 as of this writing, after touching a low of about $74,000. That’s quite a fall from the all-time highs it hit in January, when it was worth more than $100,000. Even last week, it was worth almost $90,000. It’s not just Bitcoin; the carnage is general in the crypto market.

If Bitcoin were — as true believers often say —  a government-free currency, Donald Trump’s idiot tariffs should have strengthened it. After all, one of the main use cases for Bitcoin is crime, and given the sheer volume of tariffs, smuggling and tax evasion seem like they’re about to get very popular. But for Bitcoin’s sizable base of casual owners, the allure is financial speculation. And unsurprisingly, as money shows signs of getting tight, they seem to be bailing.

The casuals have been part of what made Bitcoin explode in both price and relevance in the last several years. Bitcoin’s original stated goal was to avoid financial institutions and central banks, — a kind of libertarian-anarchist people’s currency. As a point of fact, it has not been that in quite some time, as the Bitcoin ETFs show. Since its inception the price has gone way, way up as adoption has spread beyond the libertarian true believers — by normal people and also by Wall Street.  But these people aren’t ideologically committed. One of the first things people do in a bear market is sell off their riskiest assets. And so many people who put their “fun money” in Bitcoin are selling, because they need that “fun money” in real currency now.

So in the global financial turmoil, Bitcoin is not doing so hot. Bitcoin is valuable because dollars (or yen, or euro, or whatever) are valuable, and insofar as it is a financial asset that lets you get more dollars, Bitcoin is useful. Now, it’s clearer than ever that it’s not useful for much else.

I could go over the various ways that Bitcoin is bad at being money— how it sucks for transactions, has an associated serious risk of scammers and hackers, and is wildly volatile — but the fact that it’s been used primarily for speculation I think makes the case for me. The many people who’ve sent the value of Bitcoin up aren’t viewing it as the technology or money of the future, they just like Number Go Up. 

Well, now Number is Going Down. 

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