Closed-Loop Economics: Why Bitcoin is an Investment Doomed to Fail

I agree Bitcoin has no genuine economic value and no meaningful utility. As an investor, I do not invest in Bitcoin because I believe the intrinsic value is zero. In practice, this means there is no price at which I can reasonably expect an adequate return based on the economic usefulness of Bitcoin or its income generating fundamentals. That being said, Bitcoin does not need to go to zero just because its intrinsic value is zero. In fact, I believe there is a reasonable chance that it will never go to zero in my lifetime. Why? Bitcoin’s price rests on a faith shared by millions of people: The total supply of Bitcoin is mechanistically limited, but the number of devotees is not. The early devotees believe that the religion of Bitcoin will rise over time as it becomes more entrenched in people’s portfolios and more devotees subscribe to the belief that Bitcoin is a good store of value in a world of currency debasement. As long as the number of devotees do not fall to zero, someone will step up to buy Bitcoin. You either believe in this religion and buy on faith, or you don’t. There is no middle ground.