TL;DR: The coronavirus pandemic response has governments around the world shutting down economies. Legacy financial systems are up for their biggest tests yet. Many in the ecosystem believe this is cryptocurrency’s time to shine. One notable influencer doesn’t think so. The co-owner of Bitcoin.org recently warned against looking to BTC as a hedge against traditional finance.
Bitcoin.org Owner: BTC and Cryptocurrencies are Not Hedges
@CobraBitcoin, the anonymous Twitter account famous for its contrarian, if not at times schizophrenic, takes the world of cryptocurrencies, recently turned decidedly bearish on what seems an opportunity of a lifetime. Global economies are faltering, giving way to a potential systemic collapse. As ghoulish as it can sometimes read, that does appear to be right in line with most Bitcoiners’ playbooks.
“The biggest investment mistake you can make,” the presumed co-owner and co-founder of popular online portal Bitcoin.org insisted, “is to assume Bitcoin and cryptocurrencies in general are a hedge against the traditional finance system and to naively believe Bitcoin will negate your losses from recession and stock market collapse.”
And, in truth, speculative crypto price markets haven’t provided nearly enough evidence to argue against @CobraBitcoin’s assertions. BTC proponents who have long-since dropped any claim to payments, medium of exchange, or peer-to-peer electronic cash for BTC in favor of a store of value narrative. They’ve have had a rough go of it lately trying to make the case. Whatever it is, BTC is not a safe-haven or refuge from falling equities or from fiat notes softening. Even the apocalyptic outlook of traditional gurus pumping trillions and trillions to prop-up trade and commerce hasn’t caused more folks to seek out BTC as the digital gold proponents would’ve hoped.
A Long, Hard Road We Have Ahead of Us
“People buy Bitcoin when they have extra cash to invest in something risky,” @CobraBitcoin explained, “and that’s during good times, because when times are good you can afford to gamble and dream. Nobody’s going to buy BTC when they’ve lost their job, can’t afford their house, and are struggling to get by.”
— CoinSpice (@CoinSpice) March 23, 2020
More struggle is on the way if President of the Federal Reserve Bank of Minneapolis Neel Kashkari is to be believed. Appearing during an Easter morning television news program, Kashari, who is known for his big bug eyes and championing infinite infusions of fiat into the American economy (see tweet embedded above), cautioned viewers, “This could be a long, hard road that we have ahead of us until we get to either an effective therapy or a vaccine. It’s hard for me to see a V-shaped recovery under that scenario. We could have these waves of flare-ups, controls, flare-ups and controls until we actually get a therapy or a vaccine.”
Such official sentiment matches that of the Bitcoin.org co-owner’s recent warnings. “If we enter into a deep depression, I wouldn’t be surprised if Bitcoin was trading somewhere $1000-$2000, only the most stubborn hodlers will remain, the rest will have dumped a lot, by necessity because they will need the money for rent, food, keeping their business afloat, etc.,” @CobraBitcoin scolded.
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DYOR: CoinSpice is your home for just spicy crypto things. We’re not affiliated with any cryptocurrency project or token. Each published piece is intended for information purposes only, not investment advice and not in the hope of impacting speculative markets. There are plenty of trading sites and coin-specific advocacy journals out there, we’re neither. CoinSpice strives for rigorous accuracy in our reporting. Information presented here is contingent usually on a host of factors, and the ecosystem moves fast — prices change, projects change, and at warp speed. Do your own research.
DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH.