Whether or not a given individual has or has not at some time “invested” in bitcoin or some other cryptocurrency, the bottom line is that bitcoin, as well as the other cryptocurrencies, is in the news most every day, and therefore a significant portion of the population is familiar with cryptocurrencies. We find, however, as reported by the wsj.com, which examined a study by the National Bureau of Economic Research, that “The study showed that the top 10,000 bitcoin accounts hold 5 million bitcoins,” and since there is around 20 million bitcoins in circulation, of which, it is estimated that there is about 100 million bitcoin owners, this signifies that the top .01% of bitcoin holders, control 25% of bitcoin itself, which is a staggering wealth disparity and demonstrative that bitcoin is not close to being evenly distributed and never will be. In fact, the percentage of bitcoin holders at the very top is so concentrated that it is nearly double the percentage of wealth collectively held by the top .01% in the United States, and it could be conceivably much more, because of the relative anonymity being one of the attributes of bitcoin. In other words, cryptocurrency is not something that is held by millions of people all over the world in somewhat equal amounts, but rather it is controlled, perhaps manipulated, or held by a small elite of bitcoin holders, who, in all likelihood, are the very same that are highly influential upon the narrative of bitcoin, in general.
All of the above seems to strongly suggest that bitcoin as well as all other cryptocurrencies are the new mania of the day, of which, because of its extreme concentration amongst just a few owners of such, is indicative that when those that control such a huge amount of bitcoin decide that the better part of valor is to sell what they have, and thereby make extraordinary profits, that the general public will thus be left holding the bag, much to their dismay, and to the loss of their “investment.”
To believe, somehow, that bitcoin will become something akin to traditional currencies such as the dollar is to believe something that will never happen. Rather, cryptocurrencies aren’t really currency, at all, and never will be currency, of which bitcoin is not presently used as currency by virtually anyone under any circumstances, because businesses as well as individuals desire something more stable to be the medium of their financial transactions, along also with whatever currency so being used must be universally accepted and bitcoin does not fit that bill well, at all. Rather, bitcoin should be seen as speculative, and those who believe the hype are the very same who will get burned by that hype, especially considering that the risk of holding bitcoin is extreme, for nothing goes up forever.
Perhaps those who have been on the right side of the bitcoin phenomenon will continue to be right, for the rise of bitcoin is something that appears to have never happened before in the history of the financial world, and thereby, bitcoin is unique among all other investments and all other times. This, though, doesn’t take into account the very few that control so much of bitcoin, and when their confidence abates, the carnage will be massive.