Whilst looking at the prices of gold, silver, and oil this morning, I thought I might also take a look at the price of Bitcoin, as the symbol of the crypto industry, which recently arrived to promote. This is the chart Google supplies:
I chose 5 years to add a little perspective.
The Trump boom, which started in late 2024, is not over yet, but like gold, silver, and oil, the price of Bitcoin is plummeting. It is also not a safe haven from reality, as has always been obvious.
Now, I know, part of this might be down to pressure on the dollar. But not enough to explain the falls in the price of anything I have looked at.
So, the only question left is, why is the S&P 500 doing so well? Its chart looks like this:
The FTSE100 is also largely unharmed by changes in the prices of all the commodities I have noted.
Why is the question? It's down to exuberance, again. None of this makes sense, as almost everyone knows.
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Exuberance. Animal spirits ride again. But little idea where they are going.
IMHO it shows that few have a grasp of the big picture here. That’s dangerous.
Agree the neoliberal casino won’t make sense, its seeds of destruction are built within.
‘Exuberance’!
Never has stupidity and greed been so finely and inappropriately labelled.
And that about sums up Alan Greenspan in a nutshell to be honest.
The players have no way of cashing out? They can only inflate the bubble to 1929 proportions so that central banks will buy their assets to stave off a great depression?
Something like that?
I suspect it’s purely those that bought gold through what ever mechanism – ETF’s, CFD’s, Speadbetting etc, just cashed in and will start buying again soon. Chart followers will also have noted that the gold chart for example indicated that it was over bought and well in excess of an RSI of 70, a STOCH and MACD cross etc. All bollocks but self fulfilling for traders who decided enough, and sold and then shorted
Could it be a reflection of not taxing the wealthy enough? So we know that MMT means newly created money is spent by the Government into the economy every day, and taxes deletes this money. We know that a Government running a deficit is good the economy, but look at the size of the US deficit – all that created money not being taxed back has to end up going somewhere – hence asset inflation. Then you are playing 1 asset type against another to try and eek out a margin – Gold vs houses vs bitcoin, hence the swings?
Possibly, yes.
Arbitrage is a major hedge fund activity of precisely no value to society at all.
More on diesel, etc.
https://ourfiniteworld.com/2026/02/02/understanding-deglobalization-the-role-of-diesel-and-jet-fuel/
Interesting, but likely flawed?
May be not flawed.
The Guardian claimed there is a crisis in shipping coming up. I checked and there is no hint of that in the Baltic Dry index or World Container Index. I thought the article was nonsense. Those indices are usually very reliable indicators.
https://www.bing.com/videos/riverview/relatedvideo?q=living+in+the+material+world+george+harrison&&mid=8231C8785D8877E868058231C8785D8877E86805&churl=https%3a%2f%2fwww.youtube.com%2fchannel%2fUCGVnHHo1u7Xfyht_psktcUQ&FORM=VCGVRP
Just for a wry smile.
🙂
Definitely agree with Richard Kirby that there are far too many people in the world with more money than they can be safely trusted to dispose of without breaking things.
Just heard someone called Susanna Streeter on radio 4 claiming that Gold and Silver prices have fallen in response to the appointment of a new Central Banker in the US…. apparently because ‘the markets were worried about Central bank independence and are now reassured’.
Even to my lay person’s ear this sounds like tea leaf divining.
If the Gold and Silver assets were becoming too hard to buy because the exuberance had bought them all up…. then the smart money that profits off these Ponzi setups will
just have cashed out when they thought the maximum price had been reached.
I also suspect that many people will have these automatically triggered sales of a predetermined amount when values in their trading ‘ladders’ reach a certain price….. enough of these and there is an automatic increase in people selling precisely because a high price is reached….. which is of course the very thing they invested in Gold to profit from.
On the other hand, it may be rational actors all responding correctly to the appointment of a new Central Banker.
I have one response to that claim.
It’s crass.
Do you think so?
I have no intention of blaming anyone who has lost money….
Lots of people who don’t have a great deal of experience of trading are tempted into buying cryptocurrency and assets like gold via apps your can download on your phone… they will watch the same videos I come across on Youtube and will unfortunately invest their money in precious metals or crypto rather than just thinking about what they’ve heard and trying to work out what’s going on….
I feel bad about that and I think there are lots of non-investor people losing their money.
Platforms like Binance look like they started offering Gold purchases to people this month.
If there are bigger things going on and its genuinely related to the Central bank appointment I stand corrected.
To be clear…. the people I am referring to with with more money than they can be trusted with are the people who should be paying more tax and are causing the bubbles because we are not taxing their excess income.
The people who are losing their money in smart phone trading apps are being taken advantage of and most likely cannot afford to lose the sums they are investing.
Agreed that this pattern of price moves is not immediately easy to understand.
But shouldn’t it be applauded while it is going on? Ownership of precious metals and Bitcoin is very largely the playground of rich individuals. The very recent fall in prices makes them less wealthy, and the distribution of wealth less unequal.
Shares are more widely held, certainly if pension funds are taken into account. While share prices hold up pension funding is more secure. And it does make it easier for those growing firms (admittedly not all of them) that do seek funding from the equity market, either directly or via venture capital etc.
When you remember that the FTSE100 was only just below 7,000 at the end of 1999, a less than 50% increase in its price in 25 years is a poor return for anyone who has followed the mantra of always staying invested in the market. Look at where the equivalent US market was in 1999 (the S&P500 was at 1394 at the turn of the century). That is a factor of 5 higher over the same period. Even allowing for the bubbly market now, the US share market has been a far better investment than the the UK share market, which has to raise questions about both Labour and Tory governments over the past quarter-century. If they have espoused neo-liberal economics as they are accused of doing, they have implemented them awfully badly. Even the German DAX index which was 6355 twenty-five years ago is now around the 25,000 mark.
I completely agree. What we’re seeing across markets is fragility, not confidence.
Gold and silver are swinging wildly, commodities fall and rebound without clear reason, and Bitcoin once again fails its own sales pitch as a hedge or alternative. Yet equity markets, particularly in the US, drift higher as if insulated from all of this. Precious metals are meant to signal caution. Instead they behave like speculative trades, rising and falling purely on sentiment. Crypto escapes scrutiny entirely. Bitcoin, sold as protection against instability, has proven fragile, with no income, no productive role, and no link to the real economy. Its value depends entirely on belief.
All of this is fuelled by surplus capital chasing stories. Light taxation, rising inequality, and financialisation have left vast sums with nowhere productive to go. They circulate through gold, silver, crypto, equities, and high-profile tech like AI and SpaceX. Prices rise not because value is created, but because participation itself becomes the logic.
The parallels with the dotcom bubble are obvious. Investors once poured money into any internet company, regardless of revenue or profit, and valuations collapsed when reality intervened. Today, hype around AI and SpaceX is pricing in profits that may never materialise. Costs are high, returns uneven, and much “value creation” is simply consolidation of existing work or power.
Fragility is everywhere. When the adjustment comes, large investors and early adopters benefit. Ordinary people, drawn in by apps and hype, are left holding losses. Until regulation and taxation reflect that reality, this cycle will repeat.
Richard
Without going into the validity (or otherwise) of Bitcoin and other ‘Tokens’ as any sort of useful tool, secure investment, store of worth or ‘pseudo-currency’, I would refer you to Benjamin Cowen’s YouTube channel as to the reasons for the latest fall in value of Bitcoin against the USD. He has been commenting on ‘The Cryptoverse’ for many years and has been predicting this latest Bitcoin ‘bear market’ and fall in price since late 2025. He is a serious individual/commentator (whatever you may think of Bitcoin) who comments on many related facets of the crypto and other markets – including the S&P 500 and metals.
Essentially his position is that the value of Bitcoin has and continues to move cyclically against the USD over a 4 year period and the current fall in value follows the trend of [previous cycles and is likely to reach around 50% of the 2026 all time high ($126k) -so a potential fall to around $60k. Further, his prediction is that this Bitcoin bear market is likely to last until late (October) 2026.
Whilst it is understood that the Bitcoin market is not of any use (and probably quite the opposite) to the real economy experienced by most people and that it is a market that is (at least in my view) subject to coordinated manipulation, it is nonetheless a technically interesting proof of concept of Distributed (De-centralised) Ledger Technology (Blockchain). Unfortunately Bitcoin has become a speculative and anonymous financial tool mostly used speculatively and for nefarious purposes, as opposed to having any kind of useful application. Additionally, mining Bitcoin becomes more and more difficult over time and so requires ever increasing energy consumption to acquire. Not a great reflection of human nature generally, I am afraid to have to say.
Is there any legitimate use at all for blockchain and its deep opacity?
I can think of none.
It depends on your view of the world, I think.
Here’s what Chat GPT says, although I know that this opens up an additional area of discussion and debate and has been the subject of one of your recent YouTube videos, related to Neoliberal bias;
‘ blockchain technology has numerous legitimate uses that extend far beyond cryptocurrency. Its primary value lies in its ability to create a “shared truth”—a tamper-proof, decentralized ledger that allows multiple parties to collaborate without needing a central middleman to verify every transaction.
Major global companies and governments are already moving from experimental pilots to production-level infrastructure.’
In addition, if you are do not like centralisation and centralised authorities, which might well be for good reason depending on the behaviour of an Authority, then the decentralised nature of blockchain allows for democratic decisions to be made across the blockchain by all participants without external interference.
Like any tool (a knife, AI and the internet itself) Blockchain can be used for good or ill. Human nature being what it is tends to lead to most eventualities being adopted to varying degrees.
Politely this is total bullshit.
Blockchain is encrypted. Nothing is further from “shared truth” when every transaction is seen, but is utterly meaningless because none of the data relating to it is accessible.
Richard – Thanks for your reply and I note your view of my comments. I was trying to answer two of the questions posed by you, as follows:
1. Why is the price of Bitcoin falling?
2. Is there a legitimate use for Blockchain – I can see none?
Your view of my comments on point 2 above is possibly confusing the use of Blockchain technology for Crypto Tokens and related transactions (say BTC) and the general potential use of Blockchain technology per se outside of Crypto. If my comments were lacking or unclear around this separation then please accept my apologies.
Blockchain as a technology, in the broader sense certainly has its uses we think. For example, Blockchain-based Chain of Custody in evidence management is one potential use case, think of any system that necessitates a tamper-proof ledger (systems that require provenance).
You may find the paper ‘Blockchain Technology and Decentralized Governance: Is the State Still Necessary?’ of some interest if you go this link – https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2709713.
If you read the paper – which in many ways accords with your view of things (and mine) – you will see that the author can see potential uses for ‘permissioned blockchain architecture based systems’ within the context of the State to make administrative functions more effective in terms of co-ordination, reliability and security. Such blockchain use would not be linked to any kind of Tokenisation or financial incentives and could (should in my view) be administered by the State.
I hope this reply brings some clarity to the points I made, for your further consideration.
If you get a chance to read the above paper, let me know if you have any further thoughts.
Thanks
OK, so using Blockchain which is utterly unrelated to the purpose for which it was designed does, you say, have merits. But the number of other ways you could achieve that goal are almost innumerable. I am totally unconvinced.