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Lionel Laurent

Bitcoin’s ‘Fire of Truth’ Gets Soaked by a Bucket of Water

The cryptocurrency is a poor substitute for cash in an inflationary environment.

Caution: Highly flammable.

Caution: Highly flammable.

Photographer: Angel Garcia/Bloomberg

MicroStrategy Inc. co-founder Michael Saylor, a symbol of hubris during the dotcom boom who has since gone full Bitcoin, describes the cryptocurrency thus: “A swarm of cyber hornets serving the goddess of wisdom, feeding on the fire of truth, exponentially growing ever smarter, faster and stronger behind a wall of encrypted energy.”

Cool, cool. This patter is enough to fan the cultish flames of the laser-eyed crowd and attract junk-bond investors when times are good, liquidity is plentiful and interest rates are at rock bottom. But with surging commodity prices, supply-chain risks and war painting a stagflationary outlook, that burning smell is not from the fire of truth so much as speculative valuations going up in smoke.