Collecting bitcoin mea culpas
Bitcoin’s new all-time highs are a great excuse to revisit the times we’ve all gotten this one wrong.
Everyone is flat wrong about bitcoin at some point. The real question is whether a person admits it and adjusts accordingly, or do they just keep doubling down either rhetorically or (God forbid) by betting real money.
It’s possible to be wrong in either direction for prices, by the way. Given bitcoin’s long-term strength, it’s a way more common mistake to be too bearish. Early on, I was even guilty of this myself while covering markets for Vice News, lo those two crypto winters ago.
But being too bullish is also certainly possible in some cases, including many predictions with specific short-term timeframes and specific, astronomical price targets that have turned out to be demonstrably wrong.
This is all front of mind right now because bitcoin touched fresh all-time highs above $70,000 last week, of course. Heading into Monday’s trading, the token is still just a hair shy of that milestone and now carries a market capitalization near $1.4 trillion — a valuation roughly equivalent to all the world’s silver.
In telling the story of this historic rally, the press has offered some interesting examples of past bitcoin market calls that didn’t work out — and how the issuers of those calls have responded.
Clearly in the “make adjustments as needed” school is Larry Fink, CEO of the giant hedge fund BlackRock. The Wall Street Journal just published a story about how Fink went from being a staunch bitcoin skeptic in 2017 to jumping in with both feet.
Most important, he pushed BlackRock to offer what has become Wall Street’s most popular exchange-traded fund (ETF) holding bitcoin on investors’ behalf. In just the first few months of trading, BlackRock’s fund has reportedly acquired almost 200,000 BTC, about $14 billion worth.
The Journal notes BlackRock has begun dabbling in other corners of the token market as well. The firm has invested in stablecoin issuer Circle, partnered with Coinbase, and proposed an ether ETF to follow up on the bitcoin funds’ success.
Unfortunately, in the “double down no matter what” school of thought regarding busted bitcoin calls is Gilad Edelman, a senior editor at The Atlantic. In a new essay published Tuesday, he attempted to explain “why crypto just won’t die.”
I’ll let you click through to read the whole trainwreck for yourself, if you dare. But let it suffice that Edelman essentially goes through a bunch of contortions to continue to believe what he previously believed about crypto anyway, despite a ton of new information to the contrary.
A few possible explanations for crypto’s survival that he somehow never considers include:
- Entrepreneurs are still building new services and products on top of open networks like Bitcoin and Ethereum in particular, trying to create real value for users. Because not everyone is Sam Bankman-Fried. In fact, the vast majority aren’t.
- At the previous peak in late 2021, the global crypto market was worth $3 trillion. At the post-crash lows a little over a year later, it was still worth over $800 billion. That’s what “dead” supposedly looks like? Or perhaps it’s more accurate to say that, even in crypto’s worst days, even after a ton of market value had indeed been destroyed, there was still a quite viable foundation left to build a comeback upon. This was hiding in plain sight all along.
- Maybe Edelman and his colleagues (gasp!) simply missed a few important things about the last market cycle. Maybe they were just… wrong.
But hey. What can you do about that last one? Happens to everyone sometimes, right?
This post was adapted from my free email newsletter #w3w, which covers decentralization every Sunday. To get the full version in your inbox, including additional headlines from around the web, subscribe here.
