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00:00Barry I took Bitcoin to logs in one of my support levels is seven thousand down way below where we are right now. How do you explain to your client tell what support is on any given asset. Well it's appends on the asset class. So when we're talking about bonds it's yield relative to inflation and national growth rate. When we talk about equities it's earnings and growth rate and a whole number of other factors. When we look at Bitcoin and arguably you could make the argument the same claim about any currency it's just the collective delusion of what everybody agrees a currency is worth. And when I say delusion I'm I'm not dissing fiat currency or crypto. The fact that we can exchange little green pieces of paper with long dead presidents on it and get goods and services in exchange for it. Can the crypto folks argue is is also a collective delusion albeit one backed by a standing military and a very very robust legal enforcement mechanism to collect taxes. Crypto doesn't have that second part. And so while it certainly is a consensus sentiment trade and a momentum trade and a narrative trade it lacks some of the teeth that traditional theater RNC has. And this goes back to your writing which is about how narratives have taken over the market. What's the Bitcoin narrative to bury where it holds. Well the Bitcoin narrative is the great financial crisis led to a massive group of ill advised government interventions. Since then central banks around the world have been printing printing printing. I love the mean printer goes br. And therefore all of these fiat currencies are going to become worthless. Your choice is either by crypto and drive land bows or hold onto your fiat currency which will soon be worthless. And P.S. as a public service I like to tell people send me all of your worthless U.S. currency and I promise to dispose of it properly. Bury it. There is another narrative that actually has gained some steam among the hedge fund industry among institutional investors the likes of Tiger ASCII Skybus coming on and saying that it's actually the determining factor in your outperformance because it's a macro bet on the eye. The basically worthless s increasing worthless is a fiat currency but also the money printing that we've seen the money and printer cover. And there is a question of whether they're forced sales or whether that narrative gets reversed. When you start seeing Bitcoin have its worst two day plunge since March of 2020 and when you start looking at levels that we saw 50 percent below the highs this year. Right. Right. So in the battle between China and Elon Musk China is winning at least when it comes to crypto. But you know here's the way I really think about Bitcoin and the rest of the block chain universe which is something complete. The technology is very different than the tradable asset. Bitcoin was about a trillion and change smaller than Microsoft Apple bigger than Home Depot where Chase. And so it captures an immense amount of mindshare. But if you think of this as a really successful company who's had a great run up in stock its stock price puts it in a little different context. I think there's been a the fear of missing out on the next new thing. A lot of people plowed into this maybe a little late and watching anything get cut in half is always painful if you're long and wrong especially if you were anywhere near the top of that. But I don't think we would talk about bitcoin the same way if we really thought of this as like an individual company. Now lots of folks are forecasting Tesla going to 5000 in Bitcoin going 100000 and they're all these crazy forecasts. And for the most part those wild outliers don't work well for investors. But keep in mind this has yet to come up with a solid use function. Hold aside. No kidding. Kidnapping and ransomware and other illegalities. We're still waiting for the use case for this. There are lots of signs that BLOCK Chain is going to do some really interesting things but it has yet. After 15 years it has yet to rule out angel nature of our financial economy.

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Bitcoin 'Lacks Teeth' of Traditional Currency: Ritholtz

Barry Ritholtz, a Bloomberg Opinion columnist, weighs in on the cryptocurrency debate. He speaks with Bloomberg's Tom Keene and Lisa Abramowicz on "Bloomberg Surveillance." Ritholtz's opinions are his own. (Source: Bloomberg)

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