The great American financial historian Charles Kindleberger used to say that after six decades of meticulous research into the origins of speculative bubbles, he had concluded that there was but a single constant: “There is nothing so disturbing to one’s well-being and judgement as to see a friend get rich.”
Well: if any of you have friends who got in early on Bitcoin – the price of which has quadrupled in the last six months – you must be suffering from a severe loss of mental equilibrium.
Yet it is worth looking past Bitcoin as the latest get-rich-quick scheme, and focusing instead on the deeper drivers of the global fascination with the crypto-currency phenomenon. For if he were still alive, I am sure that Professor Kindleberger would judge Bitcoin to represent the ground zero at which three of the most important historical forces at work in the world today converge.
I explain what they are, and why Bitcoin might save – rather than displace – the traditional financial system, in an article in The Daily Telegraph published on December 5, 2017.