Bitcoin and the cryptocurrency industry seem to be back making headlines after breaking all-time highs this year and last.
Bitcoin was founded as a libertarian ‘solution’ to the irresponsible actions of large banks and central governments, who crashed the economy in 2008.
Banking institutions printed vast amounts of money to save the capitalist system, which had the effect of inflating assets and enriching the capitalists, whilst also adding to the massive debt burden faced by the world economy.
Workers across the world are now feeling the impact of this massive expansion of fictitious capital, through inflation and austerity. Fictitious capital is money which has been pumped into the system without any real value to back it up.
Bitcoin and crypto’s ‘decentralisation’ has failed to provide any meaningful alternative to money, which serves as a means of payment and exchange and a claim to value in the economy under capitalism.
Additionally, those same capitalists and bankers which Bitcoin sought to take power away from, have come full circle to embrace and centralise ownership and control of it!
In fact the largest holders of Bitcoin include asset managers like Blackrock, billionaire capitalists, and even nation states.
Blackrock’s Bitcoin Exchange-Traded Fund (ETF) has already surpassed its Gold ETF in AUMs (Assets Under Management), and the president of the USA, Donald Trump, has surrounded himself with shady crypto industry figures, and has also launched his own $TRUMP ‘memecoin’.
Trump, like other members of the ruling class, has directly encouraged this gambling and speculation by expressing his desire to make the USA the “cryptocurrency and AI capital of the world”, thus preventing China from gaining an upper hand.
Aside from enormous profits to be made from those who control crypto, this growing industry also provides a boost to US dollar dominance, which is the explicit goal of some capitalists, such as Coinbase CEO Brian Armstrong.
Tether, a company which allows users to access dollar-backed “stablecoins”, now holds $113 billion USD of US Treasuries, which is more than Japan, Mexico, and Canada!
Increasing demand for USD stablecoins from crypto punters will therefore provide an indirect bid on US treasuries through the providers that purchase them. Other nations are likely to follow suit with similar models.
Although speculative bubbles will come and go, crypto is clearly here to stay. It is a truly damning indictment of capitalism that an entire industry can be built from valueless digital tokens which offer nothing productive to the world economy.
All of the overripe capital which cannot be profitably invested in commodity production is being thrown into speculative Ponzi schemes like gold, the stock market, and now the cryptocurrency industry.
The entire system must be overthrown if we’re going to ever see an end to this insanity.
