By plenty of standards, Bitcoin is a failure. Transactions on the Bitcoin blockchain take at least 10 minutes to process, which would make it cumbersome for day-to-day transactions if its wildly fluctuating price hadn’t already rendered it useless as a means of exchange. As the product of an algorithm with no inherent value or claim to a stream of revenue, Bitcoin fails the traditional test of a financial asset. And given the latest dive in prices due to the looming specter of interest rate hikes, it doesn’t seem like much of an inflation hedge, either.
But with more $720 billion tied up in the Bitcoin market as of this morning, standards are irrelevant. The only logical question left is, what constitutes a fair price?