Celsius, FTX, Genesis, insider hacks, and rug-pulls.
People lost so much money with crypto this year.
Nowhere near as much as the world lost in legacy financial markets, but it seems to hit harder with crypto. So much fraud and incompetence. So many shenanigans and scams.
It’s one thing to lose money because of your government’s fiscal and monetary policies or the collective decisions of corporations, investment firms, and pension funds.
It’s another thing to lose money because of charlatans and thieves.
Once we get through the regulation and litigation stage of crypto’s evolution, let’s hope things get better on the other side.
On to the next game
Today’s focus is not on the future but on the present.
Is the contagion contained? Are the exchanges solvent? Is the bottom in?
I can’t answer the first two questions. I’ll take a stab at the third.
In May, we saw signs of a market bottom for the first time since 2018.
November’s low of $15,600 came about six months later.
In 2011, it took two months to bounce back. In 2015, it took almost a year. In 2018, it took about five months. During those times, bitcoin’s price went up or down 50% or more before reclaiming its upward trajectory.
We’re on schedule.
All is not vanity
Does that mean the bottom’s in?
Never. The bottom is $0. As of this post, $14,000 makes sense.
If you wait for either of those prices, you could be waiting forever.
It will be years before we know whether November’s $15,600 marked the lowest price for bitcoin, and even then people will doubt it.
With so much focus on price, we don’t think about value. With so much focus on entries and exits, we don’t appreciate the good things that come from sticking around.
We miss bitcoin’s true value. It’s an asset that:
Doesn’t derive its value from any government.
Can sustain itself without political violence, military coercion, government intervention, or sovereign debt.
Works in all conditions even when counterparties fail.
Can be sent to anybody, anywhere, anytime, in any amount, without restriction, without revealing your sensitive personal information, without putting your property in another person’s control, with certainty that your transaction will go through and confirmation that every payment you receive is authentic and valid.
Whether that’s “intrinsic value” or “a scam” is debatable — but it has nothing to do with its price or any scams and thievery people use it for.
This post is also available as an NFT on Mirror.
Mark Helfman publishes the Crypto is Easy newsletter. He is also the author of three books and a top bitcoin writer on Medium and Hacker Noon. Learn more about him in his bio and connect with him on Superpeer.