Two years ago, tech investor Chamath Palihapitiya made headlines when he declared bitcoin the new gold. That statement is particularly bold given that bitcoin has been plagued with scams, fraud and price collapse since 2009. Now however, Palihapitiya, who runs Social Capital Private Equity firm is more circumspect about crypto. On an episode of his All-In podcast he announced “crypto is dead in America,” attributing it to regulators being more active against bad actors in this space and suspicious of business models used by many crypto companies.
The SEC’s renewed skepticism has coincided with some of the industry’s top names being hit with fraud and regulatory penalties, leading to their implosion (Libra) or collapse (FTX), in addition to their general lackluster performance since their last bubble burst.
Given this history, it may come as a shock that the cryptocurrency market is currently witnessing one of its greatest rallies ever. At time of writing, bitcoin’s price had exceeded $2,000 while Ethereum is also hovering near its all-time highs.
Why is this happening? Many analysts have speculated on why, with some suggesting we’re witnessing a dead cat bounce – a temporary rally in an asset or market which has seen its value decline – while others point to increased acceptance of blockchain technologies by major financial institutions, like BlackRock; such moves could help stabilize prices while making markets more accommodating for mainstream investors.
One key driver behind this turnaround is simply that crypto is growing up – moving away from its anti-government roots and into corporate life. Bitcoin’s price is increasing as SEC regulators move closer to authorizing BlackRock ETF, enabling people to buy and sell it just like they can with S&P 500 stocks.
At the same time, projects dedicated to using blockchain technology beyond cryptocurrency are working hard to expand it beyond cryptocurrencies. Their goal is that digital innovations like these could create the building blocks for alternative global currencies that circulate alongside sovereign money while transmitting economic value more safely, securely and efficiently than today’s systems can. That’s an ambitious vision which requires more than an uptick in crypto prices; investors must give these ideas their fair chance and not immediately write them off as another failed speculation scheme fad – it may take a bit longer, but could pay dividends later down the line – after all we’ve been here before before!