The notion of digital money in the digital era now seems like a no-brainer to every thinking individual.
For the very longest time, its legitimacy was disputed by the cognoscenti from Warren Buffett and his late partner in crime — Charlie Munger to Nicholas Nassem Taleb and other quants of significance in global finance.
But to all students of history and finance, who appreciate the degree to which fiat money has been manipulated beyond all comprehension in umpteen economic wars, sanctions, coups, revolutions and famines in the last few centuries, the notion of a currency, which is not beholden to governments is the best thing ever.
Fiat money has always been and will forever be a political tool.
This was a painful lesson which the United States of America learnt when the British empire was at its pomp, when the UK imposed exceedingly high tariffs on American goods in Indian, Nigerian, Ghanaian, Australian, Canadian, South African, Zambian and Zimbabwean markets.
And when it became top dog in the immediate aftermath of the second world war, the United States of America made sure that the dollar alongside gold became the currencies of global trade.
But it wasn’t until Richard Milhous Nixon ended dollar-gold convertibility in August 1971 that things really took off for the greenback (sobriquet for the dollar).
Hedge Funds and private equity firms, which had been in existence in the preceding decades became overnight monsters, creating a myriad possibilities with the devalued and ever pervasive dollar.
And even when Paul Volcker announced on the 6th of October 1979 that the Federal Reserves would be raising interest rates to curb consumer spending, a brand new industry was created overnight — bond trading.
It is important to grasp that these seismic changes are entirely responsible for the convulsions which took place in 1987, 1992, 1997, 1998, 2001 and 2008, which threatened to derail the global economy.
And it is against the backdrop of financial recklessness and the lack of accountability from successive American and British governments that Bitcoin came into being.
The white paper which set out Bitcoin’s vision and mission statement, clearly understood the need to create a currency which is fully independent of the whims and caprices of corrupt politicians and oligarchs.
Since then its asking price has crept up from 0.10 cents in January 2009 to $7,161 in January 2020, just before the world turned completely on its head. By April 2021, it had jumped to $69,000 and finally caught the attention of national governments around the world.
But not even its inventor — Satoshi Nakamoto — could have envisaged the extent to which his contraption would be adopted and corrupted by mainstream finance with the likes of CZ of Binance and Sam Bankman-Fried of FTX, creating cryptocurrency exchanges, fleecing millions, leaving them high and dry.
Has the Rubicon Finally been crossed with Bitcoin selling at $100,000?
Yes.
While Bitcoin has spawned an industry of imitators — Ethereum, Dogecoin, Altcoin — it is the only truly decentralized cryptocurrency.
The pronouncements of the Oracle of Omaha does seem quite out of step with the times and this shouldn’t come as a surprise to anyone.
There will be peaks and troughs, just as there was a few years ago, but its survival is guaranteed regardless of the policy of the incoming government.
Now who would have said this in 2009?