Last year there was some massive buzz on every news network, blog and podcast about Bitcoin. The once mocked little digital currency so popular among the more libertarian crowds had been chugging along for years without building much in the way of value. Then it exploded, going from being worth a few bucks at most to something in the range of $20,000. There were Bitcoin millionaires being created. Some countries began talking about accepting the currency or perhaps even launching their own digital versions.

What you’re probably not seeing in the news these days is the fact that the explosion has turned to an implosion. Its value is now down below $3,600 and doesn’t show any signs of stabilizing. But why? Check out this article from John Crudele at the New York Post who correctly predicted this collapse more than a year ago. Here’s why it was doomed to fail:

I discussed this subject with a colleague last week, and she and I agreed that bitcoins are hard to write about. Why? Because bitcoins are the epitome of “thin air” investments. They represent nothing — not a piece of a company, or an ounce of precious metal or the faith in a country.

It’s like writing about philosophy. Bitcoin is a thought. And thoughts have value only if other people have value them.

And bitcoin continues to be worth something only if its proponents can convince others to jump on board on the idea and bid up the price.

That’s the definition of a confidence game. You have to be confident that someone is dumb enough to keep investing in this scam.

What John is saying here is harsh but almost entirely true. Bitcoin isn’t anchored to anything. It’s just an idea. And there have been far more people interested in trading it than using it to actually purchase anything. (Assuming you can find an outlet willing to accept it.)

There is one area where I would take exception with the author’s description, though, and that’s the comparison to other mediums of exchange with perceived value. Take the US dollar for example. Particularly since the time that it was completely unlocked from the value of gold and silver held by the government, our dollar is also more of an “idea” than a thing with measurable, substantive value. Sure, you can tie the value of the dollar to our GDP or whatever you like, but it gets traded largely based on how strong people believe the US economy is. When bad news rocks the headlines, the dollar grows weaker.

In this regard, it’s much like investing in the stock market. You’d like to think that those shares you purchase represent some percentage of the value of the company offering them, but they’re really not. We’ve seen the stock market soar on some days like it’s been injected with crack. On others, it’s plummeted like a rock. Do you honestly think the real value of any of those companies, based on their total physical assets, inventory and pending sales orders suddenly dropped in half in eight hours? Nonsense. The stock crashed because investors stopped believing in it.

You’d think all of this would teach us a lesson, but you’d probably be wrong. As Bloomberg reported earlier this year, there are still entire countries, say nothing of banks and investment firms, who are moving forward with their own cryptocurrencies. The Swedes are still talking about launching the e-krona. You might argue that if it’s backed by the government of Sweden it has some level of “real” value beyond Bitcoin, but they’re still playing with fire. As author Lionel Laurent put it, what could possibly go wrong?

(Original article edited to reflect “Swedes” instead of “Swiss”)