It has taken 17 years, significant investment, a string of false dawns and multiple broken promises but finally one of the key innovations to arise from the era of the great financial crisis has done something useful: my son made dinner last night. (I was out, but I gather it was a pretty decent effort at cream of tomato soup.)
Similarly, bitcoin — the bouncing bundle of promise and potential that launched into the world around the same time as Martin kid B — has in the past week or so actually performed a pretty useful service. Proponents have told me for years that bitcoin is money (it’s not, really), that it’s an inflation hedge (come on, now), or that it’s a haven asset for times of stress (LOL), but it turns out that its most useful function is to serve as an early warning system that markets are unwell.
On several occasions of late, it has been a lurch lower in bitcoin that has led a decline in global stocks. It sinks, stocks follow. And it has sunk a lot, down by a third since early October to $84,000 or so. Only another $84,000 to go before it reaches fair value.