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In late 2022, it was easy to make fun of cryptocurrencies. The market has fallen by about two-thirds in one year. Many of the industry's biggest companies and coins have collapsed into oblivion, their nefarious practices exposed. And then the bubble that fueled the sale of receipts for pixelated images of monkeys (remember NFTs?) for millions of dollars burst. Long-time critics like me were encouraged to take part in a virtual victory lap, while the crypto team clearly had egg all over its laser-eyed face.
But just over a year later, teasing may not seem so easy. Cryptocurrency prices have rebounded significantly, with market valuations nearly doubling in the past 12 months. Earlier this month, the U.S. Securities and Exchange Commission approved the listing of 11 spot Bitcoin exchange-traded funds (ETFs), allowing investors to gain exposure to the cryptocurrency through regulated products issued by blue-chip companies that can be bought and sold like stocks. Became. -An established asset management company. Meanwhile, Larry Fink, head of BlackRock, the world's largest asset manager and one of the companies offering Bitcoin ETFs, calls Bitcoin “an asset class that protects you.” He has become something of a Bitcoin evangelist.
Is it time for people like me to admit we were wrong? Has the approval of ETFs changed the game? Crypto is kind of the same now. . . Is it legal?
Indeed, hyperbole has spread rapidly. “It's not unreasonable to suggest that.” [the SEC’s approval] “This may be the biggest development on Wall Street in 30 years,” Michael Saylor, executive chairman of software company-turned-cryptocurrency storage company MicroStrategy, told Bloomberg.
“I cannot overstate the importance of this moment.” gushing out “Today’s news is further legitimization of cryptocurrencies as an asset class,” said Brad Garlinghouse, CEO of crypto firm Ripple OnX.
But despite these lofty declarations, and the fact that this was reported as a milestone by both crypto and mainstream news outlets, what happened is decidedly boring. The only moment of excitement was when his X account at the SEC was compromised. This means that the approval of the ETF was announced in advance. The true identity of Bitcoin's pseudonymous creator Satoshi Nakamoto was not suddenly revealed. There is no newly minted asset class on offer that can magically create funds out of thin air (you may recall ICOs, STOs, and IEOs before NFTs).
No, what has happened is that cryptocurrencies have simply become an exciting and rebellious alternative to traditional finance, a way for retail investors to diversify their portfolios and asset managers to profit from a way to “become your own bank.” It just became something that provided the means. A little extra income.
In other words, cryptocurrencies in 2024 will be pretty boring. But as SEC Chairman Gary Gensler himself pointed out at the time of the announcement, boring doesn't equal legal. The commission's approval of Bitcoin ETFs is not an endorsement of Bitcoin or cryptocurrencies more broadly, but rather the SEC's long-standing commitment to Bitcoin ETFs on the grounds that they may be subject to fraud and manipulation. This is the result of a court ruling that recognizes the objection. was optional.
Gensler said in a statement: . . Bitcoin is primarily a speculative and volatile asset, and is also used for illegal activities such as ransomware, money laundering, sanctions evasion, and terrorist financing. ”
For context, other ETFs approved by the SEC include the anti-woke “God Bless America” ETF (ticker: “$YALL”), an “investment for God-fearing, flag-defending conservatives”; ) is included. The “Inverse Cramer” ETF (SJIM) aims to invest in the opposite of what television personality Jim Cramer recommends. And then there's the “VICE” ETF (VICE), which invests in “VICE-related business activities.”
Moreover, it's not just boring cryptocurrencies that exist today. For those who feel tired of non-boring variety, there's still plenty of it. For example, an online pastor was indicted earlier this month on civil fraud charges for allegedly creating virtual currency with his wife and selling it to Christians by telling them God directly told them they could get rich if they bought it. He has since said he may have “misheard God's word,” and while it's true that the couple pocketed $1.3 million, some of it was “just like the Lord does for us.” He defended himself by saying that he spent the money on “renovating the house he was told to do.” .
The truth is, whether cryptocurrencies are wrapped in neat, regulated wrapping paper and sold by BlackRock, or purchased from pastors who claim the Lord told them to sell, transactions are still taking place. It means that it has not been done. There There. So, although it may be more difficult these days, I will continue to do what I consider to be God's real work: removing the mickey.
