Bitcoin, future pledge victim of rising rates? – Finance

I have a few friends who work in banks and whose job is to manage other people’s money. I don’t think it’s a secret to say that they are a little nervous, not a drama, but just a little nervous: because of Putin and his desire to impose the ruble as a currency of payment for Russian gas and oil.

They fear that if everyone holds on to their weapons, gas imports from Russia will eventually cease, and even if winter is over, this dependence on Russian fossil fuels could lead to a recession in Europe. And it’s a nightmare! After two years of pandemics, war, and then recession, it’s not very, really not great. Especially since in the stock market we are not talking about the collapse of the stock market when there was one (I would even say two): the collapse of bonds, which did not make too much noise, and the collapse of technology stocks, which investors like to have in their portfolio. Here are some reductions for 12 months: Netflix: – 73% for one year, Uber: – 40% for one year, Meta: – 48% for one year. When the fall exceeds 20%, it is called a crash.

The most optimistic will say that this is normal (some values ​​have increased too much), firstly, because money on this planet is in abundance and they are looking for profit, and secondly, because these technological stocks rise when rates are low and fall when rates are rising, as they have been for several months. I have another friend who was once an investment banker, probably the most brilliant of his generation, and who recently told me that bitcoin and cryptocurrencies in general would lose interest without a play on words. I say without a pun because, according to him, one of the reasons for the growth of these cryptocurrencies was the fact that we lived for years in periods of low interest rates. But when interest rates rise, cryptocurrencies, he said, have no great future.

In fact, unknowingly, he says nothing more than Warren Buffett, the biggest living investor. At the age of 91, the man (one of the five richest in the world) has just reiterated that bitcoin is an asset that produces nothing and that he would not buy all the bitcoins in the world for $ 25. On the other hand, he says, if you offer to buy 1% of all farms in the United States and they ask him for $ 25 billion, he will do it. Why? and because these farms will produce food. Similarly, he says, if he is offered to buy 1% of all apartments in the United States for $ 25 billion, he will do the same. Why? but because these apartments will issue rent!

If you offer Warren Buffett all the bitcoins in the world for only $ 25, he won’t buy them because he won’t know what to do with them. In other words, the most efficient investor of all time believes that bitcoin is an asset that produces nothing as such and therefore has no intrinsic value.

Fans of cryptocurrencies will say that at the age of 91 Warren Buffett will not succeed. Maybe, but Warren Buffett and his partner and partner Charlie Manger still own $ 713 billion, a priori, they know what they’re talking about. Ah, yes, I forgot that Charlie Manger is considered a genius, these quotes are carefully studied and analyzed by the world’s greatest financiers, I randomly quote you two: “If people didn’t make mistakes so often, we wouldn’t be so rich” and another quote I love: “all I want to know is where I will die and never get there”!

They fear that if everyone holds on to their weapons, gas imports from Russia will eventually cease, and even if winter is over, this dependence on Russian fossil fuels could lead to a recession in Europe. And it’s a nightmare! After two years of pandemics, war, and then recession, it’s not very, really not great. Especially since in the stock market we are not talking about the collapse of the stock market when there was one (I would even say two): the collapse of bonds, which did not make too much noise, and the collapse of technology stocks, which investors like to have in their portfolio. Here are some reductions for 12 months: Netflix: – 73% for one year, Uber: – 40% for one year, Meta: – 48% for one year. When the fall exceeds 20%, it is called a crash. The most optimistic will say that this is normal (some values ​​have increased too much), firstly, because money on this planet is in abundance and they are looking for profit, and secondly, because these technological stocks rise when rates are low and fall when rates are rising, as they have been for several months. I have another friend who was once an investment banker, probably the most brilliant of his generation, and who recently told me that bitcoin and cryptocurrencies in general would lose interest without a play on words. I say without a pun because, according to him, one of the reasons for the growth of these cryptocurrencies was the fact that we lived for years in periods of low interest rates. But as soon as interest rates rise, cryptocurrencies, he said, have no great future. The largest living investor. At the age of 91, the man (one of the five richest in the world) has just reiterated that bitcoin is an asset that produces nothing and that he would not buy all the bitcoins in the world for $ 25. On the other hand, he says, if you offer to buy 1% of all farms in the United States and they ask him for $ 25 billion, he will do it. Why? and because these farms will produce food. Similarly, he says, if he is offered to buy 1% of all apartments in the United States for $ 25 billion, he will do the same. Why? but because these apartments will issue rent! If you offer Warren Buffett all the bitcoins in the world for only $ 25, he won’t buy them because he won’t know what to do with them. In other words, the most efficient investor of all time believes that bitcoin is an asset that produces nothing as such and therefore has no intrinsic value. Fans of cryptocurrencies will say that at the age of 91 Warren Buffett will not succeed. Maybe, but Warren Buffett and his partner and partner Charlie Manger still own $ 713 billion, a priori, they know what they’re talking about. Ah, yes, I forgot that Charlie Manger is considered a genius, these quotes are carefully studied and analyzed by the world’s greatest financiers, I randomly quote you two: “If people didn’t make mistakes so often, we wouldn’t be so rich” and another quote I love: “all I want to know is where I will die and never get there”!

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