Bitcoin users are beginning to wonder if the blockchain is officially dead after its ninth consecutive month of languishing.
In a scathing opinion piece on Tuesday, Bloomberg writer Jake Lloyd-Smith brutally tore down the digital token.
Calling BTC a “train wreck” and “absolutely dire”, the author pointed out it was possible the coin could plunge so low as four digits in the near future.
Bitcoin is currently worth five figures, at US$19,566 (A$29,000) at time of writing.
That’s a significant decline when you consider that the crypto hit an all time high in November last year of US$69,000 (A$99,000) per coin.
Overall, that means the digital asset has plunged more than 70 per cent since then. So far this year, it is down 60 per cent in terms of its return on investment.
In fact, all bitcoin’s gains over the last two years of the pandemic have pretty much been wiped.
Mr Lloyd-Smith also said bitcoin’s difficult year had ruined any notion that it could be used as a way to hedge against inflation.
“It’s safe to say that right now, it’s definitely not for preservation of wealth,” he wrote.
He even compared cryptocurrency to the Dutch ‘tulip mania” phenomenon of the 1600s, when tulips became so hyped up and highly sought after that people would spend their fortunes to buy a single flower.
Inevitably, the craze crashed, leaving a few unlucky souls penniless and with nothing but a dying flower to show for it.
Cryptocurrency is closely aligned with the traditional stock market and it has not been a great year for stocks as the Ukraine-Russian war, inflation and fears of a global recession markets like Dow Jones have tanked and entered a bear run.
Mr Lloyd-Smith noted: ‘With delicious irony, the same week it (bitcoin) registered a record, the Fed warned of perilous plunges for risky assets should the economy take a turn for the worse. As the US central bank responded belatedly to inflation, Bitcoin tanked.”
Mr Lloyd-Smith wasn’t the only bitcoin proponent to hit the token while it was down.
On Tuesday morning, a Kenyan economist, Patrick Njoroge, said through a now-viral tweet that he should be put in a mental asylum if he ever poured his cash into bitcoin.
“I can assure you that I have a lot of people who have been pushing me to put our reserves in bitcoin. If I do that, please put me in Kamiti (a jail) and throw away the key because I’ll be out of my mind”.
Investing pro Warren Buffett is also not a fan of cryptocurrency.
Earlier this year, in May, the US billionaire said he wouldn’t buy “all of the bitcoin in the world” for $US25.