The price of Bitcoin has recently dropped significantly, and some smart individuals are saying that Bitcoin is worthless, that the bubble will eventually burst, and advising everyone not to get involved.
I have an old friend abroad, a successful person, who got involved with Bitcoin even earlier than I did. Just a few days after Bitcoin was created, he started to be bearish, and for more than a decade, he has remained unwavering, which is truly touching.
In serious economics and finance, there is no strict definition of a bubble; a bubble is at most a retrospective description.
Price is a product of supply, demand, and expectations, influenced by various factors, each of which is constantly changing. The only most important feature of price is that it changes, incessantly. Ultimately, it is because human emotions are always fluctuating, entwined with greed and fear.
When prices are high, it's called a bubble; when they drop, it's called a crash. Such theories or explanations are too superficial and casual. They lack a true understanding of value and often cannot be falsified, making them metaphysical and devoid of guidance for investment.
Many well-known bubbles, like the Dutch tulip bubble, are completely imaginary and never actually happened.
Bubble theorists aim to flaunt their superior understanding, claiming to be the only sober ones while everyone else is intoxicated, and they have the ability to foresee the future. Moreover, they chant daily, believing that there will be a time when they are right, just like a broken clock that shows the correct time twice a day. With Bitcoin's recent decline, they will mock the supposed winners.
From the beginning, Bitcoin has risen at least millions of times; when it was under 1 cent, people already claimed it was a severe bubble that needed to burst. Of course, that was a huge mistake. Since its inception, Bitcoin has been the most appreciating investment asset, and those who missed this treasure cannot be considered as truly seeing the world. Their understanding is also light-years behind the times.
In fact, these people do not learn new things, stubbornly cling to their own opinions, only embracing the tattered broom they have, failing to see how technological progress impacts humanity.
If they dislike it, they won't invest; thus, they repeatedly sigh at the vastness of the ocean, curse a bit, and find solace in that.
Regardless of anything, making money is the undeniable truth. If you buy and hold, hardly anyone will lose money from Bitcoin investments; those who hold for a few years reap substantial rewards. Early investors, like those from ten years ago, have already achieved financial freedom. They should be thankful that they did not worry about bubble threat theories.
Humans are emotional beings, and price is a measure of emotions towards existence. Think about it, where in the world are there beautiful women like fairies? Hu Shi once said that even a beautiful woman carries excrement in her belly. But if you truly think this way, it loses its meaning. Beautiful women and stars are the results of so-called bubbles. Bitcoin is no exception. They all reflect human consensus, and consensus is also an emotion.
Indeed, one day, Bitcoin will return to zero. Bubble theories will eventually have their moment of complete victory. However, those who promote bubbles will not enjoy this moment; they will leave this world with immense regret and anger. Munger left with great anger towards Bitcoin; he is also considered a master in the traditional investment field. Regardless of who it is, if they do not learn, do not progress, and remain obstinate, they will become a laughingstock. The Great Wall still stands today, but where is Qin Shi Huang from back then?
Ultimately, humanity, Earth, the solar system, the Milky Way, the universe— you can also see them as bubbles; they will all burst and disappear, leaving nothing behind and lacking ultimate significance. But each person, humanity, only exists within the process, and that process is meaningful, including the process of bubble formation.
Don't suddenly get so profound that you reach the moment of world destruction; that's too far ahead and shows a bit of impatience in living.
The only correct posture is to dance with the bubble.
This is not investment advice; this is a worldview.
