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Bitcoin is here to stay, elites admit
The Financial Times, perhaps the arch critic of cryptocurrencies for the past decade, admitted that Bitcoin may have a purpose. It’s just the latest data that indicates there’s a big shift underway in how people view cryptocurrencies, from former President Donald Trump to Larry Fink. They may not fully understand what is happening (who does?), but they feel it is important.
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“Bitcoin bulls have been mostly right about its prospects as a long-term investment,” said Ruchir Sharma, president of Rockefeller International. he wrote in an opinion piece titled “Once Dismissed as Bigots, Bitcoin Bulls Must Feel Vindicated.” Noticing that bitcoin (BTC) has traditionally behaved like a penny stock that tends to pump and then dump, he said the fact that its bubble burst and recovered quickly “suggests that something real and sustainable is happening.”
“There’s an old Wall Street saying for moments like this: Only fools dance, but bigger fools are watching,” Sharma added.
True, this is not the official position of the UK-based newspaper or its editorial board, but only of a contributing writer. But there is still something significant to publish especially for the FT. He hasn’t published opinion pieces like this in years. Many of the newspaper’s journalists and editors have been staunch critics of cryptocurrencies and take every opportunity to write negative articles or post statements of satisfaction when things go wrong in the cryptocurrency world, which happens often.
Nowhere is this more evident than in Alphaville, the FT’s erudite daily markets blog, which could be read as representing the paper’s general (but unofficial) view. Here is a sample of the headlines Alphaville has published over the last four years regarding cryptocurrencies:
(Boy, did they get it wrong.)
(A thought piece on the Tether crisis.)
(God forbid, companies become interested in rising technology.)
(They might have gotten this one right.)
Notably, former Alphaville editor Izabella Kaminska changed her mind on Bitcoin in 2020 and ultimately left the FT two years later (for a variety of reasons). She wrote at the moment “Part of me has always thought of the cryptocurrency market as some kind of trap for the worst of the irrational exuberance emerging from quantitative easing and zipping [Zero Interest-Rate Policy] era.”
While the growing appreciation for Bitcoin among the world’s trendsetters and power brokers does not necessarily translate into support for cryptocurrencies across the board (a view that could be considered Bitcoin Maximalism Light), it still opens the door to more and more people are thinking more seriously about blockchain technology.
In other words, cryptocurrencies are becoming destigmatized. Time will tell how far this will spread within elite circles – it likely depends on the continued success of Bitcoin. But I can imagine a day when the default position will not be to scoff, deride, or avoid bitcoin and instead see it as part of the financial furniture.
Enter Donald Trump, who in 2021 called cryptocurrencies a “scam,” but this weekend told CNBC he had “fun” with cryptocurrencies and called bitcoin an “additional form of currency.” These are not the first positive comments Trump has made as his presidential campaign intensifies, suggesting that he no longer sees cryptocurrencies as a threat to his “America First” agenda or sees them as being born from the same populist fabric.
Furthermore, even if people are not true supporters of Bitcoin or cryptocurrencies, the number of people willing to criticize the industry seems to be decreasing.
There are a number of factors influencing this change, including the successful launch of bitcoin spot exchange-traded funds in the United States. This not only demonstrated that there was intense pent-up demand for exposure to bitcoin, but also that the Securities and Exchange Commission’s years of scaremongering about potential market manipulation was misplaced.
More importantly perhaps, as Sharma’s editorial suggests, it seems that these elite people are tired of being wrong. There are only so many supposed Bitcoin autopsies that can be written before critics have to examine their own heads.
Of course, whether or not people in high places grudgingly accept that it is not going away doesn’t really matter. Cryptocurrencies still have their flaws. The hope is that, with fewer people repeating the same tired arguments to debunk, the quality of industry criticism will increase.
Sharma himself, while accepting that Bitcoin is a viable investment, still has his reservations. He noted that bitcoin is not used much as a currency and that the idea of it becoming “‘digital gold’ [is] still a dream.” He is not wrong in saying that bitcoin is commonly used only by fanatics to buy coffee, but he contradicts himself.
Note that 70% of addresses have been inactive for more than a year as people buy and hold bitcoin, but that’s because buyers treat it as a store of value. Bitcoin may not have the market capitalization of gold today, but what exactly stands in its way? Just today, with Bitcoin’s market capitalization exceeds $1.4 trillionit has reached parity with silver.
Nothing is off the table for Bitcoin. It can continue to rise, trade sideways for months, or go back. It probably won’t reach zero, considering there is a growing group of Bitcoiners willing to buy at any price (people who perhaps a month ago Sharma would have called great fools).
Whether you invest in Bitcoin or not, it’s worth not betting against its surprise.