The Tail Wagging the Doge
How Speculators Prevent Crypto from Working as a Safe Haven
One of the most common questions I’ve been getting this week is from young investors (they wouldn’t call themselves investors, but they are) wondering why their crypto holdings are going down as fast or faster than the stock market.
“But I bought all this Ethereum because I knew the market was about to crash,” one Coinbase trader complained to me.
“Biden was printing money by giving all those stimulus checks and unemployment benefits,” another explained, sharing his rationale for accumulating bitcoin and NFTs. “I knew there was too much in circulation, and I was right. But bitcoin was supposed to be a hedge against inflation.”
Sorry, but bitcoin wasn’t supposed to be a hedge against inflation. Nor was it intended to be a non-correlated investment strategy — something that moves in the opposite direction of the stock market.
Bitcoin, and the other “original” blockchains were meant as a way for people to transact more efficiently, independently, and freely than they could with expensive, bank-issued, interest-bearing currencies. An invention that emerged in tandem with Occupy Wall Street, the blockchain was less an investment vehicle than a way of detaching our transactions from financial speculators…
