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Illustration: Lazaro Gamio / Axios

Bitcoin is up about 1,700% since the start of the year. Some attribute the surge to ordinary, if enthusiastic, investment, along with the forces of supply and demand. Others say it's a bubble, and that it will ultimately burst. Joe Borg, president of the North American Securities Administrators Association, a grouping of state securities officials, suggests it's the latter. "This is a casino," he tells Axios, "not an investment."

The bottom line: Borg, who is also director of the Alabama Securities Commission, says he could be wrong and that those who say bitcoin is just "another type of investment" will be proven correct. But he sees worrying signs of a classic investment mania.

Among the signs:

  • People have told him they have taken out home equity lines of credit to buy bitcoin.
  • Those doing so, he said, are mostly millennials and young baby boomers.
  • "They seem to think anything electronic is a game," Borg said. "There are entrepreneurs who run Facebook, and they put this in the same category."

Thought bubble: If bitcoin collapses, which has been the normal course in big, sudden investment manias, the price is highly unlikely to go to zero, meaning a lot of people will still be in the money. But lots of people will lose, too, including perhaps some who have taken out those home equity lines of credit.

That there is a fever is indisputable. It is global, and especially heavy in Asia. Ordinary South Koreans are the most aggressive bitcoin investors, in addition to Hong Kong Chinese, Japanese and Vietnamese, report the WSJ's Steven Russolillo and Eun-Young Jeong. Together, they account for almost 80% of global bitcoin trading. Other reminders of fevers past:

  • Most of these Asians buying bitcoin are the general public, not professional traders.
  • At the point last week when bitcoin went above $17,000, it was almost $25,000 in South Korea, almost 50% higher, the WSJ said. In other words, the trade is chaotic to the point of irrationality.
  • At the FT, Izabella Kaminska writes today that even central banks are "getting drunk on the collective cryptocurrency/blockchain Kool-Aid."

A point that increasing numbers of observers are making is that bitcoin is only an investment, with no other real-life, large-scale utility, at least at present: bitcoin and other cryptocurrencies are too slow and cumbersome to serve as money, their original purpose.

  • In a speech today in Sydney, Phillip Lowe, the governor of the Reserve Bank of Australia, makes the point: "The current fascination with these currencies feels more like a speculative mania than it has to do with their use as an efficient and convenient form of electronic payment."

Go deeper

Republican-led Pennsylvania court deems mail-in voting law unconstitutional

Workers count ballots for the 2020 Presidential election at the Philadelphia Convention Center in Philadelphia, Pennsylvania, U.S., on Nov. 3, 2020. Photo: Hannah Yoon/Bloomberg via Getty Images

A Republican-led Pennsylvania court on Friday ruled that the state's mail-in voting law is unconstitutional.

Driving the news: Three Republican judges sided with Republican challengers and ruled that no-excuse mail-in voting is prohibited under the state's constitution. Two Democrats on the panel dissented.

46 mins ago - World

China's ambassador warns Taiwan could spark "military conflict" with U.S.

Photo: Liu Jie/Xinhua via Getty Images

China's ambassador to the U.S. warned in a rare interview with NPR that if Taiwanese authorities "keep going down the road for independence," it would "most likely" lead to a "military conflict" between the U.S. and China.

Why it matters: Chinese officials rarely speak in such blunt terms, but veteran diplomat Qin Gang was unequivocal: "The Taiwan issue is the biggest tinderbox between China and the United States."

Updated 1 hour ago - Economy & Business

Why Neil Young's Spotify standoff matters to the music industry

Neil Young in 2019. Photo: Gus Stewart/Getty Images

Spotify will remove Neil Young's music from its streaming platform, because the 76-year-old rock icon objected to the company's response to vaccine misinformation.

The big picture: This matters more than you'd think, given the popularity of old music.