The Bitcoin Bubble Isn’t All About Trump
Cryptocurrencies would be having a good week no matter who was elected, since they rise and fall with the market — but that means they’re not a good hedge against the economy collapsing.
Not a risk-free asset.
Photographer: Chris McGrath/Getty Images EuropeI think I finally understand value of cryptocurrencies: They add some volatility to your portfolio. Maybe that’s why they have found such a champion in Donald Trump, who if nothing else adds some volatility to our politics.
And yet — I will not push the analogy between the president-elect and cryptocurrency any further — this volatility also exposes the central contradiction of crypto, which has hit record highs in the week since Trump was elected. Crypto is supposed to be an alternative to government currencies, a safe refuge if the global financial system collapses. But its history suggests it just makes your portfolio more risky. It’s not possible for something to both add risk and provide safety.