Some folks did not take Jack Bogle’s advice.
On Tuesday, the father of indexing delivered a pretty straightforward assessment of Bitcoin. “There is nothing to support bitcoin except the hope that you will sell it to someone for more than you paid for it,” Bogle said, in response to a question at at a Council on Foreign Relations event in New York. In case that was in anyway unclear, he continued: “Avoid bitcoin like the plague. Did I make myself clear?”
Well actually, no Jack. No, you did not “make yourself clear.” Because this (block)chain of fools not only drove Bitcoin through $10,000 late Tuesday, but actually “succeeded” in furiously buying a post-10,000 dip (which you’ll note took it right back to the edge of the “magic” number) on the way to pushing it up near $11,000 by early Wednesday morning:
In short, greater fools abound.
As usual, skeptics abound as well. Take Nobel Prize-winning economist Joseph Stiglitz, for instance, who told Bloomberg TV that “Bitcoin is successful only because of its potential for circumvention [and] lack of oversight.” That, he says, means “it ought to be outlawed” as it “doesn’t serve any socially useful function.”
Of course that’s not entirely true. There’s some social utility in minting millionaires which this is clearly doing, the only problem is that it seems like most of them don’t realize the irony there. Inherent in the idea of “a millionaire” is the idea that Bitcoin can be converted into fiat money. So if you are rich thanks to Bitcoin, it is only in the context of how many dollars, euros, etc. that Bitcoin can be converted to. Without that conversion, you don’t have anything. As Jack Bogle correctly notes, this isn’t backed by coupon payments or dividends or a history of serving as a store of value and as far as being a “currency”, it’s not backed by tax revenues or a government backstop and there’s no lender of last resort.
