That's like saying that investing in the S&P 500 is nonsense, because if it were so easy then everybody would be doing that, and nobody would buy bonds.
The thing is, that there is a risk/reward relationship for everything in investing. And according to this article, the return you are getting on a 3x leveraged ETF are about 20% annually (2x normal stock returns) while the risk/volatility is about 3x. So, there is no free lunch. You are only getting higher rewards for taking on much higher volatility.
It's kinda hard to create a world-class transactions system when the philosophy is that the bottleneck should be a below-average computer and internet connection.
Yes, I assume that the core rules will not be changed, which requires an element of trust, making it more similar to FIAT currency than gold in that regard.
Personally, I'm not invested in Bitcoin or any other altcoin so please don't assume I'm biased, but theoretically Bitcoin could increase in value indefinitely.
There will always be people that lose their private keys and the population of earth/universe will (probably) also increase over time.
Therefore, even when all the hype dies down, it is still designed to get scarcer and scarcer over time, regardless of the demand.
My question was purely hypothetical, in the case Bitcoin ever becomes a more attractive store-of-value or reserve asset than gold (maybe because its easier to transfer, store and verify ownership than gold) which I admit is a very big if.
For the vast majority of people Bitcoin in its current form provides a worse user experience than PayPal, VISA, etc.. because the fees are a lot higher and the transaction times are longer.
If you want to buy $1.5 billion worth of Bitcoin the $5-$50 transaction fee doesn't matter. For the majority of people it matters though.
The argument for gold is that it isn't 100% a speculative investment.
According to Wikipedia(https://en.wikipedia.org/wiki/Gold) 50% of gold's use case is in making jewelry and 10% is used for industry.
On the other hand, Bitcoin isn't used for anything, except as for a speculative investment, not even as a currency or as a "decentralized PayPal".
taking the anarchist's approach: if people are happier owning tusks and using the stock market as a casino than seeing elephants and having stable finances, let em do it.
To link it to the world of investing, other key factors that drive returns/risk of assets are value, size, quality, yield and volatility, besides momentum. It's a multi-variate equation.
Interesting read about feedback loops and self-fulfilling prophecies.
However, the author made it sound as if "momentum" is the only thing that drives human behavior. While it's certainly a part, I wouldn't say it's the only force driving human decisions.
The thing is, that there is a risk/reward relationship for everything in investing. And according to this article, the return you are getting on a 3x leveraged ETF are about 20% annually (2x normal stock returns) while the risk/volatility is about 3x. So, there is no free lunch. You are only getting higher rewards for taking on much higher volatility.