Economics of Bitcoin

As cryptocurrency continues its historic rise, with Bitcoin crossing the $100k mark, excitement is at an all-time high. In this post, I explore four popular trading strategies embraced by crypto bulls and uncover the flaws in their investment theses. We'll dive into arguments around fiat currency, the money supply, and central banking while analyzing whether Bitcoin and other cryptocurrencies truly solve the economic challenges they claim to address.

Cryptocurrency is a hot topic among investors, with many considering it an alternative asset class. It’s a polarizing subject: on one side, there are the optimists and enthusiasts, eager about innovation and the prospect of massive returns. On the other, more traditional thinkers critique Bitcoin as nothing more than a “castle in the sky.” I have thought long and hard about this…

In this post, I analyze four common investment theses presented by Bitcoin bulls, using fundamental economic principles to evaluate their claims. This post was inspired by a Mark Meldrum video I recently watched that provided some context on this subject, I aim to clarify some widespread misconceptions about fiat currencies and their explain role in our economic system.

Whether you’re a crypto believer or a skeptic, this discussion will provide a balanced perspective on the promises and pitfalls of Bitcoin and other cryptocurrencies, helping you navigate the complexities of this volatile and often misunderstood asset class.

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