Photo-Illustration: Intelligencer
For the entire existence of cryptocurrencies, a big part of the appeal of the digital currency was how strange everything was. From its inception in 2008, bitcoin was this new kind of anti-government money, perfect for someone to buy drugs online anonymously, even when it was susceptible to be lost either expelled garbage day There were copycat fads: the โinitial coin offeringโ bubble of 2017, the shit mania of 2021 - as well as really weird and silly things, like the Monkey NFT which were, briefly, food for the art world. Whatever his opinion on all these things, they made a lot of people very, very rich, at least for a time, on paper. This year, however, has been different. After last year's market crash and last week's conviction of crypto fraud kingpin Sam Bankman-Fried, the strange thing about it all is not a new trend or a new affront to good taste. Cryptocurrencies had one of their best days in 18 months on Thursday, and it has a lot to do with abandoning its rebellious origins and gaining approval from Wall Street giants and government regulators.
A single bitcoin briefly rose to nearly $38,000 on Thursday, the highest level since the early days of the total market collapse triggered by the vaporization of two of the world's largest cryptocurrencies, terraUSD and luna, in early 2022. Why did it suddenly rise from the dead? Cryptocurrency investors have a big new story to tell, and since the price of bitcoin is not tied to a physical asset, like oil, or the economic power of a country, like the US dollar, it lives and dies by persuasion. of its history. It's on any given day. This time, the narrative appears to be about the growth of cryptocurrencies, his haircut, a suit and a real job, on Wall Street. Specifically, the Securities and Exchange Commission appeared to be moving closer to giving the green light to an exchange-traded fund from investment giant BlackRock that would allow investors to buy bitcoin as easily as they buy the S&P 500. (An ETF trades like a stock, but It can represent an index or a commodity or a nearly infinite variety of other financial bets). And it wasn't just bitcoin. Ethereum, the world's second most popular cryptocurrency, was also hitting highs not seen since April, surpassing $2,000 per token, after BlackRock. registered a corporate entity in Delaware for an ethereum ETF.
For Wall Street to finally start trading bitcoin or ethereum ETFs would truly begin a new era in the world of cryptocurrencies. ETFs are part of the lifeblood of the financial industry and an industry itself that, as of last year, was valued at 6.5 billion dollars. In essence, a crypto ETF would make it easier for financial institutions (your pensions, mutual funds, hedge funds, and the like), and the average 401(k) holder, to easily trade and profit from digital currencies without having to do so. Worry about encryption keys, or getting hacked, or something like that. (At least, not directly. However, if BlackRock got his bitcoin hacked, it would be very bad.) Bitcoin ETFs have largely been a pipe dream for the past ten years, ever since the Winklevoss twins first tried to get government approval for one. (The SEC rejected it four years later.) What changed recently was a lawsuit from Grayscale, a company owned by Barry Silbert's Digital Currency Group, a major (if currently troubled) player in the crypto space. In August, an appeals court ruled that the SEC had arbitrarily denied Grayscale's application for its own ETF, which would have used many of the same security and market surveillance protocols that other funds used. Last month, the SEC said no appeal the decision, giving the appearance of an almost insured ETF. "In my view, this was totally expected and it was just a question of when, not if," said Bloomberg Intelligence analyst James Seyffart. saying. "But BlackRock's name is obviously huge and just seeing this filing in Delaware caused ether prices to skyrocket."
This all seems to go against what made cryptocurrencies so...crypto-y. After all, this was the money that was most closely held. associated with Occupy Wall Street and which Jamie Dimon has called a โfraud.โ The price increase is the type that would normally come from secret, anonymous Telegram โpumpingโ groups that would disappear as soon as they made a profit. That its value is rising because regulators are now okay with it and companies like BlackRock, which manages more than $10 trillion in assets, are getting on board, is deeply strange and hilarious, not just because it's the opposite of what which symbolized see you later, but because... what's the difference? For most people who own a bitcoin, what matters is that the price will go up (aka "number goes upโ), nor the high-flying rhetoric about its ability to turn each holder into a sovereign wealth fund in itself. Perhaps this is why Gary Gensler, chairman of the SEC and main antagonist of the cryptocurrency markets, recently came out and suggested that FTX could soon relaunch as a cryptocurrency exchange, now that Bankman-Fried is no longer a threat. After his comments, the price of the FTX digital currency, which most investors have long thought dead, increased by 90 percent - one of the best days in its history.
