The current Bitcoin phenomenon proves there is always a greater fool in speculative bubbles – until the bubble bursts. The run up in price can only be due to speculation. Bitcoins have no intrinsic value – whatever market value there might be is based only on what others are willing to give in return for the Bitcoins. (Just like the U.S. Dollar – Bitcoins are not backed by gold or any other commodity. Unlike the U.S. Dollar – government does not force others to accept your Bitcoins.) If you want to gamble, start accumulating Bitcoins. If you want to make money using Bitcoins, try arbitrage – quickly buy low in one market and sell high in another market. Just don’t get caught holding Bitcoins when the bubble bursts.
