Is Bitcoin Just a Glorified Pebble? Exploring Its Current Lack of Usefulness

What You Need to Know Today

Losses in Asia-Pacific
U.S. markets were closed Monday for the Labor Day holiday. Asia-Pacific markets fell Tuesday. South Korea’s Kospi index lost 0.4%, while the country’s consumer price index for August rose just 2% year on year, the lowest since March 2021.

Reconstruction Still Underway
China’s housing market, plagued by bankrupt builders and dropping prices over the past few years, is still in a trough, according to JPMorgan’s chief China economist Haibin Zhu. Despite efforts to stimulate and support the market, those measures have not yielded results.

Brazil’s Ban on X Upheld
A panel of Brazil’s federal supreme court justices voted Monday to uphold the country’s ban on X. This decision follows a previous order from Brazil’s top justice to ban X after it refused to comply with content moderation and legal representation requirements.

Huawei Tries to Upstage Apple
As Apple announces a new iPhone on Sept. 9, Huawei aims to capture attention with its own product launch on Sept. 10 at 2:30 p.m. Beijing time, just hours after Apple’s event.

[PRO] Steady Green Stocks
With pending interest rate cuts and an upcoming presidential election in the U.S., markets are expected to experience fluctuations. However, two stocks within the green sector are predicted to remain stable.

The Bottom Line

I want to preface this section by saying I’m no cryptocurrency expert. So please take everything with a pinch of salt.

Boy, is cryptocurrency strange. I don’t mean that in a derogatory way. On the contrary, I’m dazzled by how high the price of bitcoin is, and how it’s entered investing discourse, albeit at the margins.

Cryptocurrencies are like pretty pebbles on the beach. Someone likes them and starts collecting them; another appreciates their beauty. These pebbles exchange hands for a price. You might think this narrates how currencies come to life, as seashells were once used as coins.

Yet, the analogy between pebbles and bitcoin short circuits: bitcoin just isn’t used as a currency now. Does anyone actually buy things or services – apart from highly illegal ones – with bitcoin?

Currently, bitcoin is mostly an asset that holds value, and enthusiasts hope it appreciates. It’s a pebble not used to exchange for anything but money itself.

In other words, it’s an asset made solely for investment. Yet financial advisors have shunned bitcoin ETFs, which are experiencing net outflows. Bitcoin also saw around a 10% loss in August, marking its worst month since April.

Despite this, bitcoin is still up 38% for the year, even though there’s no real use for it – for the moment. It’s an asset that lives in its own world, worth five figures. That’s both impressive and scary.

Paul Yeung | Bloomberg | Getty Images