Posted on 05/20/2022 6:14:09 AM PDT by Kaslin
Some cryptocurrency haters are spiking the football now that there has been a downturn in crypto markets arguing that the dip portends of the death of crypto. This dip is a correction and something that will weed out flawed crypto models making the market stronger. The bottom line is that cryptocurrencies are here to stay.
That which did not kill crypto will make it stronger.
The invention of cryptocurrencies starting with Bitcoin were a groundbreaking development in means of storing and transferring value. The creation diversified the way people can transact business. The idea was to create digital currencies that are secured on decentralized networks based on blockchain technology not controlled by government. Markets and consumers, not government bureaucrats, control the value of cryptocurrencies. Libertarians were drawn to this idea because it relied on free market forces, not government manipulation of the money supply, to dictate how much a cryptocurrency was valued.
The most well-known virtual currency is Bitcoin established in 2009. This was created as a peer-to-peer system to transfer value from one individual to another in a way that cut out government as the creator of the system. It was revolutionary and it is the dominant force in the market today. Others copied that business model because it envisioned a world where private currencies could be created in a way that would hedge against relying on government created dollars to underpin the economy. And it worked for some and failed for others.
There is no doubt that the epic failure of the cryptocurrencies Luna and Terra have provided ammunition for cryptocurrency skeptics to proclaim the end of cryptocurrency writ large. They seem to be missing the epic collapse of the dollar going on before our eyes to understand that all means of the transfer of value are struggling right now. It is true that the crypto markets, including Bitcoin, have been on a downturn and CoinDesk reports that “Bitcoin's slide over the past few days is setting it up to extend a seven-week losing streak, already the longest in a trading history that dates back to the early 2010s. The cryptocurrency has suffered from a downturn in broader markets, stricter crypto regulations, waning retail interest and systemic risks in the crypto sector.” Cryptocurrencies have mirrored losses on Wall Street while the failing cryptocurrency creations have hurt the market overall.
As expected, some who are dinosaurs when it comes to advances in the technology of currency are using the meltdown in the crypto market as exposing the “hollowness of its Libertarian promise.” Greg Ip wrote on May 18, 2022, at The Wall Street Journal, “to its advocates, cryptocurrency is, at its heart, a libertarian project to free mankind from the shackles of government—most of all its power to debase a ‘fiat’ currency by printing more of it. Do Kwon, the South Korean creator of the stablecoin TerraUSD, regularly equated fiat currency to ‘state violence.” Ip argued that rising interest rates have “exposed the hollowness of crypto’s libertarian promise.” The opposite is true. The dominant cryptocurrency Bitcoin is down, yet not suffering from anything other than the overall downturn the economy.
The use of this dip to trash Libertarians is unfounded and a pretext to mask the failures of the government manipulated dollar. Ip uses the phrase “caveat emptor,” let the buyer beware, to attack cryptocurrencies market growth because some have lost money in the downturn. Yet, Federal Reserve and federal politicians get a pass when they engage in activities that are destructive to wealth and the dollar.
The Fed has engaged in ‘free money’ policies for a long period of time creating a massive new balance sheet of cash that has exacerbated inflation. At the start of the Covid pandemic and, as Dan Mitchell of the Center for Freedom and Prosperity explains, the Fed “dumped a massive amount of money into the economy (technically, the Fed increased its balance sheet by purchasing trillions of dollars of government bonds).” Mitchell quoted Milton Friedman’s theories that “easy-money, low-interest-rate approach produced the rising prices that are now plaguing the nation.” He theorized that the free money policies set the stage for what we are seeing today with inflation the result.
Market analysts should be cheering the demise of Terra and Luna as showing that markets work while these same analysts should support efforts to Audit the Federal Reserve and put in place some guardrails to prevent actions by a future Fed to create so much cash that inflation continues to steal value from Americans savings and retirement.
As much as some want to declare cryptocurrencies as dead, they are wrong. Cryptocurrencies are responding to market forces and becoming stronger – much stronger.
I am one of the haters.
I think it is a giant scam.
Do the blogs use different writers on pump days and dump days? Or do the same writers just flip flop?
I don’t care for it either. It looks to me like some funny money.
Bitcoin hit a high of 67K 7 months ago and just last week hit 25K.
Cryto is here to stay but that I get a kick out of the bitcoin fanboys. They confuse crypto not going away with bitcoin not going away. It’s like saying its safe to invest your life savings in one stock because the “stock market” is not going away.
I believe that cryptocurrency is here to stay now that our government has decided to tax it.
With that one change the US has signaled that it wants crypto around.
For the record, that was when I dumped all of mine. After I had made a small profit from repeatedly buying low and selling high.
We still grow tulips.
I’m not fond of the idea of creating value out of thin air, but I do like the idea of being able to move money around outside the government/banking system.
They still know whose wallet has what in it.
Get ready for a flood of the usual haters....”its a scam”, “its a ponzi scheme”, “it has no use case”, “you can’t hold it in your hand like paper money or precious metals”, etc.
Its all ignorant and wrong of course, but that never gets in the way.
The crypto market is experiencing a downturn - just like equities and bonds. It happens periodically. It always bounced back to higher highs eventually. As a relatively new market/asset class, it has much higher volatility which should come as a surprise to nobody.
What I’ve noticed this time is there isn’t much panic among the experienced crypto traders and investors. Everybody knows to just sit tight if not view the downturn as a buying opportunity, and just wait for the market to come around again.
Crypto is not going away. Some crypto projects/coins certainly will. There are plenty of fly by night cryptos which actually are scams. Its not unlike the internet boom of the 90s. There were lots of internet projects that were pure crap and which went under in the 2000 dot com bust.
Yet there were also several good companies which provided spectacular returns over time and the sector grew massively since then.
Its a similar story with crypto. Don’t put everything into any one project. The larger ones with good backing/capitalization are much safer bets than the smaller startups. Just be patient and HODL.
Paper currency that a government can make as much as they want is the real scam. Trying to find value elsewhere is the smart play, but not risk-free.
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