What is Money?

According to Wikipedia, money is any item of verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context.

As a practical matter, money is what the government says it is, or isn’t.

The People’s Bank of China recently said that all cryptocurrency-related transactions are illegal.

The U. S. is looking at stricter regulation of cryptocurrencies.

What should investors make of all this?

The crypto bulls see this as support for their perceived need for an alternative financial structure that takes monetary control from government.  The bears see this as further evidence that government will act to make sure that the current crypto boom is unlikely to have legs and will eventually be relegated to history’s dustbin, like tulip bulbs.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA