CNBC Daily Open:
Bitcoin isn’t really a
currency (yet)
P UBL I S HE D MO N, S E P 2 20249:02 P M EDT
Yeo Boon Ping
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People walk past a neon sign advertising a Bitcoin and Ethereum crypto currency exchange in Warsaw,
Poland on 19 May, 2024.
Jaap Arriens | Nurphoto | Getty Images
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What you need to know today
A flat market
U.S. markets were closed Monday for the Labor Day holiday. The pan-
European Stoxx 600 dipped 0.04% as diverging sectors balanced the scales:
Telecoms stocks added 0.78% while retail stocks lost 0.77%. Meanwhile, real
estate listings company Rightmove popped 27% after Australian rival REA
Group said it was considering making an offer for it.
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. On Friday, Brazil’s top justice Alexandre de Moraes
issued an order to ban X after the Elon Musk-owned company refused to
comply with earlier court orders concerning content moderation and the
appointment of a legal representative in Brazil.
Volkswagen warns of plant closures
German automobile conglomerate Volkswagen warned it might have to close
more vehicle plants in Germany because of high costs. “Germany … is falling
further behind in terms of competitiveness,” said Volkswagen Group CEO
Oliver Blume, who also cited “new competitors” in the European market
contributing to an “extremely tense” situation.
Huawei tries to upstage Apple
Apple’s announcing a new iPhone on Sept. 9, but Huawei wants to make sure
it steals some of the company’s limelight. Huawei will hold its own product
launch on Sept. 10 at 2:30 p.m. Beijing time, just hours after Apple’s event.
Teasing the new product, Huawei executive Richard Yu said the company has
“turned science fiction into reality.”
[PRO] Bumpy months for bitcoin
Bitcoin lost 10.25% in August, making it the cryptocurrency’s worst month
since April. But, if history is any guide, the worst is not over. September is
historically the worst month for bitcoin (and other markets), which
means bitcoin might fall back to the $50,000 level.
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, if at the margins.
That’s because, to me, cryptocurrencies are like pretty pebbles on the beach.
Someone likes them and starts collecting them. Someone else appreciates
the pebbles’ beauty. Pebbles exchange hands for a price.
You might think I’m narrating a story of how currencies come to life. Seashells
and conches, after all, were once used as coins in many parts of the world.
And if you think about it, that’s how all money functions: there’s no inherent
value, only a socially agreed one.
But here, 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 that shouldn’t be approached with a ten-foot pole
– with bitcoin?
Bitcoin, then, is mostly an asset that holds – and enthusiasts hope –
appreciates in value. It’s a pebble that isn’t used to exchange for things other
than money itself.
In other words, it’s currently an asset made solely for investment. Yet financial
advisors have shunned bitcoin ETFs, which are, in fact, seeing net outflows.
Bitcoin also lost around 10% loss in August, giving it its worst month since
April.
Despite that, bitcoin’s still up 38% for the year, even though there’s no real
use for bitcoin – for the moment, at least. It’s rather like an asset that lives in
its own world and is worth five figures. That’s both impressive and scary
