This is an edited version of a live discussion about the current FTX debacle, the trajectory of Crypto, and the rise of Central Bank Digital Currencies. Is the future one of “harder, faster safer money”?
Well, those following my channel over recent years will know that I have been quite skeptical of Crypto wave, and while Crypto has gone through several major drops in its history, this time could be different. I was not impressed with so called celebrities starting spruiking them, including Kim Kardashian, but when financial mainstream started getting involved, my concerned grew. In the US, Fidelity’s plans to offer Bitcoin in 401(k)s – their equivalent of superannuation – could impact an entire generation.
Its worth recalling the sector spiked to around $3 trillion in total assets last November, before plunging to less than $1 trillion, with Bitcoin and a range of altcoins plunging from record highs.
What started this year in crypto markets as a “risk-off” bout of selling fueled by a Federal Reserve suddenly determined to rein in excesses has exposed a web of interconnectedness that looks a little like the tangle of derivatives that brought down the global financial system in 2008. The collapse of the Terra ecosystem — a much-hyped experiment in decentralized finance — began with its algorithmic stablecoin losing its peg to the US dollar, and ended with a bank run that made $40 billion of tokens virtually worthless. Crypto collateral that seemed valuable enough to support loans one day became deeply discounted or illiquid, putting the fates of a previously invincible hedge fund and several high-profile lenders in doubt.
The recent crypto plunge, with Bitcoin down about 70% from its peak, is fueling widespread financial troubles for companies involved in the space. Lenders like Celsius Network, Babel Finance and Vauld have suspended withdrawals, while firms such as Coinbase Global Inc. are cutting jobs. This is what is now being called a crypto winter – but will spring ever come?
Go to the Walk The World Universe at https://walktheworld.com.au/
Bitcoin ETF’s are hitting the market but they need to be handled with caution, and represents a further intrusion of “main stream” financial thinking into Cryptoload. We discuss the latest developments, with the help of a recent The Conversation article.
I caught up with CEO of BTC Markets Caroline Bowler, on the Day Elon Musk said Tesla had bought big into crypto, and as a result the markets spiked higher – to above AU$60k for a Bitcoin.
We discussed the broader context of crypto, and explored some of the drivers of the recent rise, as the sector comes of age.
CONTENT
0:00 Start 0:38 Introduction 1:00 Bitcoin’s Run 6:20 Gamestop’s Implications 9:00 The Underlying Revolution 11:10 Demographics 15:30 How Much Is Criminal? 17:10 Keep Wallets Safe! 19:50 Future Growth? 21:15 Closing
A real burning question is whether crypto’s in general and Bitcoin in particular are set to rise higher in the months and years ahead, or whether the bulk of the $1 Trillion in the sector is set to be wiped out. So in the first of a series of posts we discuss the potential play-book.
Harry Dent is an Author and Economist, with strong views, based on studying long-term cycles. How does he read the market?
And you can catch his debate with Michael Terpin scheduled for Thursday 28th January 2021 (Sydney time) by registering at http://www.greatbitcoindebate.com
NOTE: DFA has no commercial connection with the event, or its sponsor.