Crypto Market Musings
- As I write, bitcoin is trading around $29,000. Ethereum is trading close to $1,900. And the rest of the markets are a mess.
- Welcome to crypto allergy season, everyone. The bear market is over. The bull market hasn’t started. That means cryptos aren’t moving up in lockstep. And they’re not moving down in unison. Some days will be good. Some days, the markets or certain cryptos will have allergies.
- Macroeconomic factors still matter. Inflation, investor confidence, pressures on the banking system, and monetary policy continue to play a strong role — both positive and negative — in driving the crypto markets.
What Vin Is Thinking About
One thing I’m thinking about is how important regulations are in the evolution of new technologies and new sectors.
Two key decisions fueled the growth of the internet:
- President Clinton’s decision to (temporarily) ban taxes on e-commerce sales — including state sales taxes
- Congress’s decision to shield internet companies from responsibility for what their users post.
Those two moves allowed the internet to take off. E-commerce gained in popularity. And the user-generated content/social media era was born. Without those protections in place, it’s entirely possible that the digital world as we know it — from streaming to social media and e-commerce — wouldn’t have developed as quickly (or at all) and the U.S. would’ve fallen behind Europe and Asia in terms of robustness and innovation.
Crypto needs a similar regulatory moment. The EU just adopted a regulatory framework that should allow the industry to grow. Meanwhile, Coinbase is suing the SEC in an attempt to convince the agency to do its job. What a mess. I will talk about Coinbase suing the SEC extensively in the next Crypto Insider podcast.
Ethereum’s move from a proof-of-work protocol to a proof-of-stake protocol has cut the amount of energy the network uses by 99.9% according to New Scientist. Now that’s impressive.