It’s been a nightmare couple months for cryptocurrency investors. They’ve watched their BitcoinBTC +0.3% holdings hemorrhage 70 percent of their value since the record high of $69,000 back in November. Overall, they’ve suffered crypto losses totaling more than half (55%) of capitalization, or an estimated market loss of $2 trillion.
The days when crypto enthusiasts could talk about crypto as if Bitcoin were the new reserve currency, or the digital equivalent of the gold standard, or even a transformation of what it means to invest, are over. Crypto looks more like a classic boom and bust investment, like Dutch tulips, rather than the next best hope for humanity.
As I warned in an earlier Forbes column, the crypto boom was driven by systematic policy failures by major central banks. As long as they made bad decisions about monetary supply or failed to take on inflation, cryptocurrencies were going to look like solid investments. As soon as central banks shook off their inertia, crypto values started heading south. Meanwhile, the threat of regulation of the crypto market—regulations that might strangle the Bitcoin goose—has raised additional uncertainties about where the market is headed, and whether it pays to buy low now—or run for the hills.
Nonetheless, as Bloomberg reports, venture capitalists still want in the crypto game. They’re being smart. They sense that despite the burst bubble since January, cryptocurrencies will be here to stay. They may not save humanity from itself, as some thought, but they remain a valuable speculative instrument but also a store of value when other investments look uncertain or too volatile to handle.
At the same time, Bitcoin and crypto do offer a deeper secret that is important to the rest of humanity. That secret isn’t what they do, but how they do it. i.e. with Distributed Ledger Technology or blockchain.
Continue reading: https://www.forbes.com/sites/arthurherman/2022/06/27/can-crypto-still-save-the-world/?sh=73ae1763581a
The days when crypto enthusiasts could talk about crypto as if Bitcoin were the new reserve currency, or the digital equivalent of the gold standard, or even a transformation of what it means to invest, are over. Crypto looks more like a classic boom and bust investment, like Dutch tulips, rather than the next best hope for humanity.
As I warned in an earlier Forbes column, the crypto boom was driven by systematic policy failures by major central banks. As long as they made bad decisions about monetary supply or failed to take on inflation, cryptocurrencies were going to look like solid investments. As soon as central banks shook off their inertia, crypto values started heading south. Meanwhile, the threat of regulation of the crypto market—regulations that might strangle the Bitcoin goose—has raised additional uncertainties about where the market is headed, and whether it pays to buy low now—or run for the hills.
Nonetheless, as Bloomberg reports, venture capitalists still want in the crypto game. They’re being smart. They sense that despite the burst bubble since January, cryptocurrencies will be here to stay. They may not save humanity from itself, as some thought, but they remain a valuable speculative instrument but also a store of value when other investments look uncertain or too volatile to handle.
At the same time, Bitcoin and crypto do offer a deeper secret that is important to the rest of humanity. That secret isn’t what they do, but how they do it. i.e. with Distributed Ledger Technology or blockchain.
Continue reading: https://www.forbes.com/sites/arthurherman/2022/06/27/can-crypto-still-save-the-world/?sh=73ae1763581a
