Join institutional investors, analysts and strategists from the world's largest banks: Subscribe today
Already have an account? log in
A Few Quick Thoughts On Crypto As ‘Winter’ Thaws
Fed cuts (or, more accurately, the expectation thereof later this year) are "sparking animal spirits."
So said BofA's Michael Hartnett in this week's installment of his popular "Flow Show" series.
Maybe equities will take a break after one of the more pronounced four-month rallies in a decade, maybe they won't, but if you're the Fed and you think financial conditions matter in the pursuit of lower inflation, you haven't done yourself any favors by fostering froth. Froth like that illustrated i
I agree it is bs, but to me, it is like modern art. If people pay a lot of money for something that I think is worthless, it doesn’t hurt me. I won’t blow my money on that stuff, but let them. Go for it boys and girls! In the real world they will still be buying things produced by the companies I do invest in.
I guess we shall see…
The fact that I can transfer money in USDT in 10 minutes on a Sunday morning rather than having to wait till Monday and the transfer then taking anything between 1 and 2 business days doesn’t seem useless to me?
I don’t like Gold (or diamonds) as an investment but I don’t deny there can be good reasons to have (some of) your wealth in easily portable non-income generating “assets”. Especially outside of the western world.
The fact that you can distribute ownership of a project in a fast and efficient manner – better than keeping an Excel spreadsheet of your cap table, that’s for sure – could help in many small-ish projects and/or decentralised ones. I’m a bit disappointed crypto backed social media/music sharing hasn’t picked up but otoh Helium seems to be doing well…
Etc.
“We shall see?”
We’ve already seen. And there are about 20 different ways to transfer money instantaneously that don’t involve crypto. You surely know that, which means you’re being disingenuous. I can move $5,000 right now, to somebody in another state or even in another country, and they can spend it 30 seconds later, and none of us have to touch crypto. Where exactly are you transferring money to and from and in what amount that you need crypto? I mean, sure, if you’ve gotta get $50 million from your account to somebody else’s on Sunday morning at 6:46 AM, it might be somewhat cumbersome, but wtf are you doing moving $50 million around on Sunday morning at 6:46 AM? The constellation of existing apps and digital payment methods that we have available to us are sufficient to handle any and all normal people’s Sunday morning cash transfer needs.
It doesn’t matter. I don’t know why I bother. There will never be a time when believers will admit the truth about this.
The saving grace for me is that as long as there are believers out there, my stakes in this nonsense will always be worth something. That’s why I kept them.
While that’s true in developed countries where there are many alternatives to transferring money, I don’t think that’s true in much of the rest of the world. I do agree that vast majority of crypto is bs and relies purely on greater fool theory, but I do think there’s a kernel of utility there. Anyway, like you said, just because something is only based on greater fools doesn’t mean it won’t go up..
Some brutal burns in this piece, laughed out loud a ton
I’d be curious if Heisenberg or anyone else here has come across Lyn Alden Schwartzer and her book Broken Money. She gave a talk at Princeton regarding her book & potential use cases for crypto/btc.
https://gceps.princeton.edu/booktalk-lynalden/
Hosted by Carolyn Wilkins, former senior deputy governor Bank of Canada.
He covered crypto much to my chagrin, I revoked my subscription at the time. You make a good point about the greater fool theory which is the reason I also invested initially.
I disagree about your derision of blockchain. Blockchain allows for validating distributed database entries that cannot be refuted. IBM has a commercial database product that is based on blockchain that allows multiple companies to make entries (orders, invoices, etc.) that cannot be forged and cannot be deleted. So it has its place.
That said, crypto is very definitely a Ponzi scheme working on the greater fool theory. No different from Tulips in Holland in the 1630s. As Bruce Schneier (one of the world’s leading cryptographers) wrote in his blog on 22 April 2022 “It is insane to me that cryptocurrencies are still a thing”.
Tom, with all due respect, I’ve read everything I need to read about blockchain’s potential beyond crypto (which is to say I wore myself out trying to divine that “something,” whatever it is, that I was allegedly missing) and there just isn’t anything there. And I wanted, desperately, for there to be something there. Because I wanted to make some money with it somehow. But the truth is, every use case was covered a very long time ago, and in some cases centuries and even millennia ago. This is all a solution looking for a problem. That’s why it hasn’t been widely-adopted. I hate to put it this way (really I do) but if I want to validate a transaction, a receipt works just fine. I mean, just think about /re-read your comment. You’ve basically said that the only way for multiple companies to enter orders, invoices “etc” into a database is through a blockchain-based product offering. Do you not see anything kinda funny about that?
A friend of mine owns Bitcoin and I was explaining to him there is no rational for valueing crypto, as well as it being too volatile to be a store of value. His reposte was that he didn’t mind putting a small amount of money aside in the hope it would shoot up. Just had to laugh at him and I then explained to him he could help me by buying my fine art photographs. At least he would be able to hang those up on the wall and appreciate them. Just wish some of crypto folk would buy my art, as I have never sold a single print from website. I seek classic beauty and for those of you think my art might be rubbish take a look at http://www.deangrossmith.com