Bitcoin briefly touched $27,000 for the first time in nine months, with it continuing to trade at close to $26,500 as of writing.
Stocks on the other hand have seen a red day with Dow Jones falling by 1% while gas dropped 5% and oil saw a 1.5% fall.
Credit Suisse saw a bigger drop of 7% despite reassurances by the Swiss central bank of a $50 billion loan chest.
First Republic too, another wobbling bank, saw a far bigger plunge of 26% a day after big banks deposited $30 billion to re-assure the market.
The market however is gripped by uncertainty, primarily due to a lack of transparency in regards to just what exactly is going on in these banks.
So commodities like gold are seeing an uptick of 2.5% today, while bonds drop to 3.4% in yields from around 4% in February.
Bitcoin has also joined the safe assets ‘party,’ with the crypto now back to a sound and safe stern oasis of tranquility, in contrast to last year.
That bear year moved fairly quickly in crypto however, punishing the reckless fairly severely to get back to the sound money business where you can’t fractional reserve without playing with fire.
So FTX, Luna and all that are the very old story, in crypto, and the very new one in fiat which might make bitcoin go maybe even parabolic.
Almost exactly four years ago to the day, bitcoin rose from $4,000 in April to $16,000 in June 2019, ostensibly sparked by an April fools joke of our own here at Trustnodes.
If that repeats, then the corn might head off to $50,000, and the macro is fairly ripe for it, but first it has a bit of resistance at $28,000.
Just how strong that resistance is however depends on how quickly the corn wants to move as the pause at $25,000 might have cleared some of the $28,000 resistance to give a bit more way to the $32,000 resistance.
All on the up though, potentially as the corn will do what he wants, but crypto is at least narratively now back to being an insurance and far more so than in an almost a decade.
Because ten years since the Cyprus haircuts, a far larger public now can see first hand and contrast the old paper banking and the new code based digital banking.
Sure, we had collapses here too last year, but that’s why we built defi where there were no collapses – save for the usual hacks hiccups of minor projects or of non decisive sums.
Some however wanted to play that defi in centralized entities, and we’re all for choice so that’s their business.
We could however see these centralized entities on the public blockchain. There was no real uncertainty therefore, as for something like FTX for example all that was needed to be known where the market is concerned was known in about 48 to maybe 72 hours, including how far the contagion might go, who was affected, what are the amounts, and basically everything.
The only unknown was whether the authorities would act to send Sam Bankman-Fried, FTX’s CEO, to jail because that one was not on the blockchain. They did, as it happened, send him to court.
In the paper system in contrast, the banking system, this same sort of information is in confidential documents and reports with regulators and even those are only part of the picture.
We have to trust thus both that banks themselves are being truthful and that regulators are too, and we’re left with just trying to analyze peculiar acts like big banks depositing on smaller banks.
If this doesn’t show that code money, if not the future then is and will be a significant part of it, then go and build some stone age escapado on the Metaverse because that’s where you belong.
The banking system however currently has its role, and a very important one. Moreover, as the example of four years ago shows, the current price action might very fundamentally not really have much to do with that banking system.
Some see the two in competition, we seem them more as one upgrading the other because crypto holistically is a hybrid system where you have the bearer asset, but also banking like entities or trusted intermediaries operating on the very transparent rails of the blockchain.
It’s a new form of limiting the trust required and that can be abused, of limiting the uncertainty which itself can be very damaging.
A new form of knowledge thus, financial knowledge, and that translates to a new form of power, for man.
These banking troubles therefore, as far as cryptos are concerned, are more the re-establishment of some facts.
That being that crypto is not unsafe, not more than other assets in any event including fiat, and that crypto is not uniquely volatile as we have seen with ‘safe’ bonds and what are becoming bank meme stocks.
Plenty in finance knew all this already of course, which is why plenty of young bankers have joined this space, but the wider public might now be learning it too, certainly anyone with more than $250,000 that needs to put it somewhere, you’d think anyway.
And so bitcoin is back, with a train. It has left yet another station of $25,000, though whether it returns is anyone’s guess, but this guy might be in a very long journey, a train journey, from California to New York, and right now it might well still be just in San Francisco.
