The Financial Times, perhaps THE arch-critic of cryptocurrencies over the past decade, has conceded that Bitcoin might just have a purpose. It's just the latest data point that there is a great shift happening in how people view crypto, from ex-President Donald Trump to Larry Fink. They may not fully grasp what's going on (who does?), but they sense it's important.
"The bitcoin bulls have been proved mostly right about its prospects as a long-term investment," Rockefeller International Chair Ruchir Sharma wrote in an opinion piece titled "Once dismissed as fanatics, the bitcoin bulls must be feeling vindicated." Noting that bitcoin has traditionally behaved like penny stocks that tend to pump and then dump, he said the fact that its bubble burst and quickly recovered "suggests that something real and sustainable is going on."
"There is an old Wall Street saying for moments like this: only the fools are dancing, but the bigger fools are watching," Sharma added.
True, this is not the official position of the U.K.-based paper or its editorial board, just a contributing writer. But it still stands out as something significant for the FT in particular to publish. For years, it hasn't published opinion pieces like this. Many of the paper's reporters and editors have been staunch critics of crypto, and take any opportunity to write negative articles or post self-satisfied statements when things go awry in crypto, which is often.
Nowhere is this more apparent than on Alphaville, the FT's erudite daily markets blog, which could be read as standing for the general (but unofficial) view of the paper. Here is a sampling of headlines Alphaville published over the past four years pertaining to crypto:
Little evidence that a spot bitcoin ETF would expand the market
(Boy, did they get that one wrong.)
Let crypto burn
(Charming.)
How stablecoins are destabilising crypto
(A Tether crisis think piece.)
Why bitcoin is worse than a Madoff-style Ponzi scheme
(Madoff was pretty bad.)
Oh no, now Deloitte with the crypto nonsense
(Godforbid companies take an interest in ascendent technology.)
The crypto Buffett lunch has been postponed. Lucky Warren Buffett.
(They may have gotten this one right.)
Notably, former Alphaville editor Izabella Kaminska had a change of heart on Bitcoin in 2020 and ultimately quit the FT two years later (for a number of reasons). She wrote at the time "part of me has always thought of the crypto market as a type of honeytrap for the worst irrational exuberance emerging from the quantitative easing and zirp [Zero Interest-Rate Policy] era."
While the growing appreciation for Bitcoin among the tastemakers and power brokers of the world doesn't necessarily translate to support for crypto across the board (a point-of-view that could be considered as Bitcoin Maximalism Light), it does open the doors to more people thinking more seriously about blockchain technology.
In other words, crypto is becoming destigmatized. Time will tell how far this will filter up within elite circles — it likely hangs on bitcoin's continued success. B but I can imagine a day where the default position isn't to sneer, jeer or steer clear of bitcoin and instead view it as part of the financial furniture.
Enter Donald Trump, who called crypto a "scam" in 2021 but told CNBC this weekend he has been having "fun" with crypto and called bitcoin an "additional form of currency." These are not the first positive comments Trump has made as his presidential campaign ramps up, suggesting he no longer sees crypto as a threat towards his "America First" agenda or considers it cut from the same populist cloth.
Further, even if people aren't out-and-out Bitcoin or crypto supporters, the number of people willing to criticize the industry appears to be dwindling.
There are a number of factors influencing this shift, including the successful launch of spot bitcoin exchange-traded funds in the U.S. Not only did this prove there was intense pent up demand for bitcoin exposure but also that the Securities and Exchange Commission's years of fear mongering about potential market manipulation was misplaced.
More importantly perhaps, as Sharma's op-ed suggests, it seems like these elite folks are tired of being wrong. There are only so many supposed Bitcoin autopsies that can be written before critics have to examine their own heads.
Of course, whether or not people in high places begrudgingly accept that it's not disappearing doesn't matter much. Crypto still has its flaws. The hope is that, with fewer people trodding out the same tired arguments to be debunked, the quality of industry criticism will rise.
Sharma himself, while accepting that bitcoin is a viable investment, still has his reservations. He noted that bitcoin isn't being used much as a currency and that the idea that it'll become "'digital gold' [is] still a dream." He's not wrong that bitcoin isn't commonly being used to buy coffee by anyone but fanatics, but he does contradict himself.
He notes 70% of addresses have been inactive for longer than a year because people buy and hold bitcoin, but that's because buyers treat it as a store-of-value. Bitcoin may not have gold's market cap today, but what exactly is standing in its way? Just today, with Bitcoin's market cap crossing $1.4 trillion, it reached parity with silver.
Nothing is off the table for Bitcoin. It can continue to rally, trade sideways for months or ratchet back down. It's likely not hitting zero, considering there's a growing group of Bitcoiners willing to buy at any price (people who perhaps a month ago Sharma would have called the greater fool.)
Whether you invest or not in Bitcoin, it pays not to bet against it surprising you.
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– D.K.
@danielgkuhn
daniel@coindesk.com
