CNBC Daily Open: Bitcoin isn’t really a currency (yet)

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

A flat market
U.S. markets were closed Monday for the Labor Day holiday. The pan-European Stoxx 600 dipped 0.04% as diverging sectors balanced the scales: Telecoms stocks added 0.78% while retail stocks lost 0.77%. Meanwhile, real estate listings company Rightmove popped 27% after Australian rival REA Group said it was considering making an offer for it.

Brazil’s ban on X upheld
A panel of Brazil’s federal supreme court justices voted Monday to uphold the country’s ban on X. On Friday, Brazil’s top justice Alexandre de Moraes issued an order to ban X after the Elon Musk-owned company refused to comply with earlier court orders concerning content moderation and the appointment of a legal representative in Brazil.

Volkswagen warns of plant closures
German automobile conglomerate Volkswagen warned it might have to close more vehicle plants in Germany because of high costs. “Germany … is falling further behind in terms of competitiveness,” said Volkswagen Group CEO Oliver Blume, who also cited “new competitors” in the European market contributing to an “extremely tense” situation.

Huawei tries to upstage Apple
Apple’s announcing a new iPhone on Sept. 9, but Huawei wants to make sure it steals some of the company’s limelight. Huawei will hold its own product launch on Sept. 10 at 2:30 p.m. Beijing time, just hours after Apple’s event. Teasing the new product, Huawei executive Richard Yu said the company has “turned science fiction into reality.”

[PRO] Bumpy months for bitcoin
Bitcoin lost 10.25% in August, making it the cryptocurrency’s worst month since April. But, if history is any guide, the worst is not over. September is historically the worst month for bitcoin (and other markets), which means bitcoin might fall back to the $50,000 level.

I want to preface this section by saying I’m no cryptocurrency expert. So please take everything with a pinch of salt.

Boy, is cryptocurrency strange. I don’t mean that in a derogatory way. On the contrary, I’m dazzled by how high the price of bitcoin is, and how it’s entered investing discourse, if at the margins.

That’s because, to me, cryptocurrencies are like pretty pebbles on the beach. Someone likes them and starts collecting them. Someone else appreciates the pebbles’ beauty. Pebbles exchange hands for a price.

You might think I’m narrating a story of how currencies come to life. Seashells and conches, after all, were once used as coins in many parts of the world. And if you think about it, that’s how all money functions: there’s no inherent value, only a socially agreed one.

But here, the analogy between pebbles and bitcoin short circuits: bitcoin just isn’t used as a currency now. Does anyone actually buy things or services – apart from highly illegal ones that shouldn’t be approached with a ten-foot pole – with bitcoin?

Bitcoin, then, is mostly an asset that holds – and enthusiasts hope – appreciates in value. It’s a pebble that isn’t used to exchange for things other than money itself.

In other words, it’s currently an asset made solely for investment. Yet financial advisors have shunned bitcoin ETFs, which are, in fact, seeing net outflows. Bitcoin also lost around 10% loss in August, giving it its worst month since April.

Despite that, bitcoin’s still up 38% for the year, even though there’s no real use for bitcoin – for the moment, at least. It’s rather like an asset that lives in its own world and is worth five figures. That’s both impressive and scary.