This time last year, the non-fungible, electron-only Bitcoin (not in your pocket) was worth $24,642.79, but as I’m writing this, it’s worth $54,478.19: a rise significantly over 200% over twelve short months. Elon Musk bought 43,000 of those slippery tokens three years ago, when each blip on the screen was worth $45,068.05, so that means he’s currently sitting on a tidy profit of $405 Million…enough to cover some of his Twitter losses, or perhaps send another SpaceX rocket skittering into the sea. Just like his rockets, though, what goes up must come down, and if you track back to February 2019, Bitcoin was “trading” at $3,849.90, which graphically illustrates the currency’s notorious volatility.
Should Bitcoin ever return to earth with anything like that velocity, Elon’s looking at a loss of $2.1 Billion. So, hopefully, he’s got his broker on speed dial…
And there you have it, in a nutshell: trading in Bitcoin isn’t for the faint-hearted. But, of course, markets don’t move by themselves, so it’s worth pausing for a moment to ask what lies behind (or beneath) Bitcoin’s stratospheric price increase this month. Especially given the token’s (admittedly self-proclaimed) importance as the poster boy of Blockchain, which is a much more secure, long-term bet: positively fizzing with potential to take intermediaries out of a whole slew of commercial transactions, from banking to buckets online, and everything in between. Blockchain has the power to bring buyers and sellers together, releasing the pent-up potential of increasingly connected international markets. Still, it can do it all better working in lockstep with a non-fiat currency, and Bitcoin is the most obvious candidate.
Which brings us back to those pesky apostrophes a few paragraphs up: why do we say crypto “trading” and not trading full stop? Well, just ask Sam Bankman Fried, currently staring down the barrel of a hundred-year sentence for pumping up a fraudulent cryptocurrency market, or any one of the (at least) four other hapless, would-be crypto kings following in his wake: all of them facing US charges for commodity and wire fraud. And that’s just the United States…it’s hard to create a reliable market for Bitcoin if we leave it all to grifters in tee shirts and shorts. And that (in another nutshell) is why global cryptocurrency markets (so essential for Blockchain’s future) have to be properly regulated..
So let’s raise a glass and hoist up a hopeful flag for the Securities and Exchange Commission, which last month approved the first-ever US listing of an Exchange Traded Fund (ETF) to track Bitcoin on a fully compliant, tee-shirt-free platform. It’s a game-changing moment for crypto, with no less than eleven approved markets so far, enabling even the faint-hearted to buy Bitcoin derivatives without the heartache and turbulence of actually forking out for Bitcoins: no more digital wallets floating unanchored in the ether; no need to open an account with Binance either, which itself pleaded guilty to Bank Secrecy and AML violations last December, coughing up a whopping $4 Billion fine (www.justice.gov), and no more wild west, trigger happy teenagers spooking what seems set to become a cornerstone of tomorrow’s commerce. That’s why hedge fund titans like BlackRock, Fidelity, and Invesco have already moved to manage those crypto ETFs, and its why Bitcoin is on the threshold of achieving a sounder, more sustainable footing for the future.
And, in case you’re still wondering, it’s also why the price of Bitcoin spiked so spectacularly this month. Take a good look…this is what the future looks like.
Red Ribbon Asset Management (www.redribbon.co) aims to harness the full potential of emerging technologies, working to meet the needs of global communities as part of a circular economy, and, in the process, recognising the compelling demands of Planet, People and Profit.
India has been at the heart of Red Ribbon Asset Management (www.redribbon.co) for more than a decade, shaping its successful investment strategies in conjunction with an unparalleled knowledge of the Subcontinent’s economy, delivering higher than average investor returns and looking after the Planet and People in the process.
In the absence of effective regulation, Bitcoin has suffered a series of Bankman Fried knocks over recent months, but now the SEC is centre stage…and that will change everything.
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Red Ribbon Asset Management (www.redribbon.co) aims to harness the full potential of fast evolving and emerging technologies to meet the needs of global communities as part of a circular economy, fully recognising the compelling demands of planet people and profit.