What an amazing ride! There’s been a lot to process over the past couple of weeks in the crypto space. Especially for those experiencing significant bearish market activity for the first time. Though technically overall price activity has been to the downside, there’s as much as ever to be positive about.
In the wake of the recent bearish price action and all the negativity that comes with it, Raoul Pal called focus to a more important, and positive takeaway. Though the crypto markets are volatile, they are functioning as intended.
Beneath the head line:— Raoul Pal (@RaoulGMI) May 25, 2021
Crypto had a major, major VAR-shock test and NOTHING happened.
Leverage liquidation was offset by overcollateralisation. No one was left holding the baby.
No firm went under.
The Fed didn't need to step in.
Defi didn't break and carried on near normal
In another interesting sign of maturation worth calling attention to, it appears stable coins have begun to take on an ever more critical role as a crypto safe-haven / off-ramp in times of extreme volatility. Rather than going through the trouble of converting crypto funds back to FIAT, investors exiting BTC or ETH, more and more prefer to keep their funds in crypto by utilizing stable coins such as Tether, USDC, and DAI.
As #Bitcoin price falls, the supply of the big three stablecoins $USDT, $USDC and $DAI have continued up and to the right.— glassnode (@glassnode) May 27, 2021
During this sell-off, stablecoins have grown by:$USDT up $14.2B$USDC up $9.72B$DAI up $1.22B
Flight to safety? or dry powder?https://t.co/PgQ5v95KpL pic.twitter.com/IVuZl82Dqt
After years of perhaps only regarding the asset as experimental, last year Billionaire hedge fund manager Paul Tudor Jones began making a serious case for Bitcoin and cryptocurrency investments upon publishing ‘The Great Monetary Inflation’ thesis. Though not self-described a Bitcoin enthusiast, he’s a major proponent of the future of currencies worldwide digitizing, and the inherent increasing likelihood of Bitcoins accessibility, usability, and desirability in this digital future. Fast forward to this past week…
"The Apple Wallets, Payments, and Commerce (WPC) team is seeking an experienced Business Development Manager to lead Alternative Payments Partnerships. We are looking for a proven professional in global alternative and emerging payment solutions.” Specifically desired qualifications for the position include: “At least five years experience working in or with alternative payment providers, such as digital wallets, BNPL, Fast Payments, cryptocurrency etc."
There are too many possibilities to even begin speculating just what the implications of this hiring might be. The potential is obviously massive and the sentiment is bullish for the crypto industry as a whole. Especially when paired with news of more traditional financial industry giants proclaiming growing interest and support for cryptocurrencies like Bitcoin and Ethereum.
Billionaire investor Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, has been critical of Bitcoin and cryptocurrencies in the past. However, at the recent 2021 Consensus conference, Dalio surprisingly revealed “I have some Bitcoin”. Though he continues to express concerns surrounding regulation, this is very encouraging and positive news.
“One of the great things, I think, as a worry is the government having the capacity to control ... bitcoin, or the digital currencies. They know where they are, and they know what’s going on”
“I suspect that Bitcoin’s biggest risk is being successful, because if it’s successful, the government will try to kill it and they have a lot of power to succeed.”
“The more we create savings in [bitcoin], the more you might say, ‘I’d rather have bitcoin than the bond.’ Personally, I’d rather have bitcoin than a bond. And then the more that happens, then it goes into bitcoin and it doesn’t go into credit, then [governments] lose control of that.”
Also during this past week, another previously skeptical billionaire investor Carl Icahn declared he is currently exploring committing upwards of $1.5 Billion towards investments in the crypto space. A significant shift for someone who has expressed negative opinions over the years. Though he has not officially announced taking any cryptocurrency positions, he has now openly stated taking an interest in the overall crypto landscape.
“I’m looking at the whole business. I’m not looking at what to buy necessarily at this time. I’m just looking at the whole business, and how I might get involved with it.”
Icahn also states that cryptocurrencies are “here to stay in one form or another” also stating that alternative currencies are becoming popular as a natural progression of economic inflation. A massive shift from his previous opinions. Though it is exciting to see such well-regarded and influential financial industry players take an interest, they certainly aren’t the only ones with increasing FIAT inflation and dollar weakness concerns...
Six trillion dollars?— Edward Snowden (@Snowden) May 28, 2021
This is good for Bitcoin.
All of these individual instances of continued crypto interest, adoption, and faith amount to something more important than current bearish market action. Things are much different than they were only a year ago, not to mention how much has changed since the last time the crypto market faced such steep and rapid price declines. There is now another kind of support where there was once resistance. It’s the kind of essential, fundamental, forward looking support that appears evermore likely to result in long-term success.