Bitcoin is back: capitalism’s crypto chaos returns

The capitalists are once again piling into Bitcoin and other cryptocurrency tokens. Yes, Bitcoin is back!

The infamous cryptocurrency hit a record high of $72,000 last month, on 14 March, having tripled in value in the past year.

Other tokens have also benefited, such as Elon Musk’s beloved ‘Dogecoin’, with an estimated value of over $2.7tn for the first time in two years.

There’s a lot of talk of the next token going “to the moon”. Like thin air, however, these so-called ‘digital assets’ have no intrinsic value. All this trading is simply speculation.

It is amazing to think that some people are getting phenomenally rich on this stuff. It brings to mind the ‘tulip mania’ of the 17th century, and the Florida land speculation of the 1920s, where vast sums were won and lost.

So far, the cryptocurrency craze is not as obvious a danger. Nevertheless, it is clear that such scams are built into the capitalist system. And given the fragility and uncertainty in the global economy, the fallout from these bubbles bursting could cause wider damage back in the real world.

Pure speculation

There have been 11 Bitcoin-based exchange traded funds approved by the US Securities and Exchange Commission this year.

Big investors are getting in on the act, such as BlackRock, the world’s biggest asset manager. Some of the world’s biggest banks – Morgan Stanley, Wells Fargo, and Bank of America – are lining up to get involved. They want to ‘diversify’ their assets, you see.

The divide between pure speculation and ‘sound’ finance is again breaking down / Image: The Communist

The experience of the crash of 2007-2008 – and the solemn promise to avoid high-risk toxic assets – has seemingly been forgotten about altogether. The capitalists are just like the drunk who repeatedly vows “never again!” the morning after.

But why spoil the party? When an ‘asset’ is valuable simply because people believe it is, then the more believers the better!

The divide between pure speculation and ‘sound’ finance is again breaking down.

As one commentator on the Bitcoin focused podcast The Wolf of All Streets recently stated: “TradFi is just as degen as the crypto community is.”

This is jargon for: “Traditional finance capital is just as reckless and degenerate as the ‘crypto community’ of speculators” – which is true.

Trump cashes in

Another hyped-up stock that has attracted attention is the Trump Media and Technology Group, trading under the ticket ‘DJT’.

This is the owner of Donald Trump’s struggling social media platform Truth Social. It became a public company after merging with a ‘blank cheque’ company, known as a ‘SPAC’, which acquires companies through mergers and acquisitions.

These stocks attracted a multibillion dollar valuation, several billion dollars in a single day, with their value soaring by 56% upon trading markets opening. A few days later, the same stocks fell by more than $1bn. But Trump, as a majority shareholder, has made billions on the deal.

Another hyped-up stock that has attracted attention is the Trump Media and Technology Group, trading under the ticket ‘DJT’ / Image: Gage Skidmore

The whole thing is a pyramid scheme. The company does not make any money. In fact, it loses a great deal of it. And its main product, Truth Social, is haemorrhaging users.

At this point the company is valued at around $5.7bn, which means that it is trading at a preposterous 1,400 times its revenue!

A company trading at 10 times or 20 times its revenue would be bad enough. 1,400 times is out of this world. It has no basis in reality.

But why let the facts ruin a good story? The reality doesn’t matter: it’s the ‘feeling’ or ‘sentiment’ that matters – a bit like Bitcoin, which has no intrinsic value.

Casino capitalism

Speculation, parasitism, and gambling has always been an intrinsic feature of capitalism – a further indication of the rottenness of the system.

It’s not only tech-bro investors who will lose out in this casino, however. Given the instability in the world economy and the global financial system, such recklessness could bring the whole house down.