smiling family with turkey celebrating thanksgiving day at home
Last Thanksgiving a lot of crypto enthusiasts were forced to eat crow instead of turkey.
After all, many friends and relatives bought bitcoin or ether after first hearing about it over dinner in 2017. While most were not expecting to retire on these investments overnight, they also did not foresee the bitcoin price dropping 80% (from $20,000 to below $4,000) in the next twelve months.
This years conversations might still turn acrimonious, but they will likely have more to do with President Trumps impeachment hearings, the 2020 election, or the perilous state of the global economy.
That said, there is still much to discuss regarding crypto. Here is what everyone should know before they sit down for that 2:30 pm dinner.
The Price of Bitcoin, Ether, and other Crypto Assets Are Rebounding
If your Uncle Charlie was unfortunate enough to buy into the market in late December 2017, he is probably still licking his wounds. However, most people probably do not realize that the prices of bitcoin and ether have at least doubled since their nadirs at the end of 2018.
The bitcoin price has risen from slightly above $3,000 to $8,300 today
Ethereum has moved from $84 to just above $175
These gains may not make everyone whole, but they are encouraging.
Additionally, there is a significant increase in institutional interest in the space, lending platforms continue to expand, and financial markets are diversifying into products such as derivatives. All of this will add transparency, reduce fraud and arbitrage opportunities, and make regulators happy.
Crypto is in the Spotlight like Never Before
In what was probably beyond Bitcoin creator Satoshi Nakamotos wildest dreams, bitcoin entered the presidentialtwittersphere. On July 11th President Trumpdirected a series of tweetsat bitcoin, libra (Facebooks coin i.e. Zuck buck), and cryptocurrencies writ large, dismissing them as unregulated assets with no innate value or use cases other than to support illicit activity.
The president has almost 67 million followers on Twitter, and the reach of these quotes is far higher when one takes into account press reports and shares. To people who avoided the 2017 hype, this was bitcoins coming out party.
It is almost irrelevant that the posts cast crypto in a negative light because:
Crypto represents a threat to the U.S. dollars global dominance, which has been a driver of U.S. economic prosperity for decades. It is also useful when it comes to sanctions. If President Trump made a statement, it was likely going to be negative.
Most observers recognize that governments are risk adverse, especially when it comes to money
If President Trump felt it necessary to tweet about bitcoin, Libra, and crypto he must feel that there is more substance than smoke
And now 67 million people are curious.
Mark Zuckerberg Became the Hero Crypto Deserved, but not the One It Wanted
If the presidential spotlight wasnt bright enough, Facebook founder and CEO Mark Zuckerberg brought it into solar-eclipse territory when the company announced its stablecoin initiative, Libra, in June. (For readers unfamiliar with stablecoins, they are a novel form of crypto asset that is designed to maintain a constant peg to an asset such as the U.S. dollar. Libra will actually be pegged to a basket of global reserve currencies).
The announcement was widely criticized amongst regulators and populations around the world for a couple of reasons.
The Facebook CEO, Mark Zuckerberg, testified before the House Financial Services Committee on ... [+] Wednesday, October 23, 2019 Washington, D.C. (Photo by Aurora Samperio/NurPhoto via Getty Images)
There remain multiple legitimate questions about how Libra will operate as an open platform yet remain secure and compliant with global sanctions and relevant regulations
Facebooks reputation is at an all-time low, much of it stemming from incidents such as the Cambridge Analytica scandal and growing concerns about the companys privacy policies. So why would anyone want to now give the company access to their financial data?
Mark Zuckerberg actually acknowledged the irony of the Libra announcement when he testified in front of Congress this fall. In his opening statement he said, Im sure people wish it was anyone but Facebook putting this idea forward.
It remains to be seen when or if Libra ever gets off the ground, but regardless Facebook did crypto a favor. It again highlighted how the current financial system has failed to onboard the 1.7 billion people who are unbanked, underscoring one of cryptos main value propositions.
Now More than Ever, Crypto Represents a Port in the Storm
Though U.S. markets may seem a bit erratic, the global economy is teetering on the brink of another recession. Citizens in the European Union and other countries around the world such as Japan, with negative interest rates are actuallypayingbanks to hold their money and lock-in their losses rather than watch their wealth wither away.
Dovish monetary policy from banks around the world, such as quantitative easing programs and further interest rate reductions may prevent a global recession, but they are unlikely to lead to create a thriving global economy. At least in the near term.
Although bitcoin, ether, and other forms of crypto have some correlation to global markets, they represent the building blocks of a new global economy and model of wealth creation that is decoupled from central banks and monolithic companies.
This suggests that they will clear their own path, one which is more equitable and transparent than the world in which we live today.
To 2020 and Beyond
Even though crypto has been around for 10 years, it is fair to say that we are still in the second inning. Or as Winston Churchill once put it, Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.
The industry is recovering from the 2018 bear market, and trends are looking up.
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- JPMorganBitcoins Biggest EnemySuddenly Appears To Be Going All In On Crypto - Forbes - June 2nd, 2020
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- Bitcoin Rising, Satoshi Discoveries, & Google Enters the Race: Bad Crypto News of the Week - Cointelegraph - June 2nd, 2020
- The Last Time This Happened, Bitcoin Surged From $3,150 to $14,000 - Cointelegraph - June 2nd, 2020
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- With Riots Erupting in US Cities, Using Tools of Peaceful Protest Can be More Meaningful - Bitcoin News - June 2nd, 2020