Crypto promised to defeat Wall Street but the opposite appears to be happening
Last Updated on 6 November 2023 by CryptoTips.eu
The Chinese savant Sun Tzu (author of famed 2,000 year old manuscript The Art of War) teaches us that “he who knows himself as well as the enemy, wins every battle”. In the fight between crypto and classic finance, we have to admit that when we look back at 2020-2021 the combination of ‘halving‘ (in May 2020) combined with ‘stimmy’ (the stimulus checks that just about everyone in the US got in the second half of 2020 and 2021) probably helped to ensure that Bitcoin and crypto had an amazing bull run in those two years. That hype led to a Bitcoin price record of $69,000.
At that time, many crypto influencers were hoping for Bitcoin at a price of $100,000 and you saw the first ‘laser-eyes’ appearing in social media images. They were also certain that crypto would one day take over Wall Street altogether and that Bitcoin would replace the US dollar.
When Terra first and then some other crypto companies got into trouble in April of last year, many short-term investors decided to get out. After FTX went bankrupt in November of last year, it seemed as if crypto would not survive and Bitcoin dropped to $15,000.
During the last months of the year, it seemed as if classic business media had nothing good to say about crypto. Revenge is a dish best served cold of course.
Bear market
In 2023 it all looks different again. While crypto used to think it would take over Wall Street, recently the reverse has happened. Bitcoin doubled in price again (from $15k to $30k) and Wall Street set up their own crypto platforms.
“Assets often move from weak hands to strong hands during bear markets,” explained Matthew Sigel, analist at fund manager VanEck. “We think that’s what is happening in crypto. A lot of losses last year were taken by retail or immature players, and now here come the big boys of traditional finance.”
Others agree. Tyler Gellasch, CEO of investor organization Healthy Markets stated:
“While many crypto firms built their businesses around not complying with the law, traditional finance firms have already mastered making money trading an asset or operating an exchange while also complying with securities laws,”
“The SEC might appreciate that, and certainly serious institutional and individual investors would.”
The good news is that many analysts in the US believe this is just the beginning. According to a recent Washington Post article, many Wall Street financial giants have been buying Bitcoin at a discounted rate (read under $20k) for the past year and won’t sell until they make a good return on their investment.
Who knows, at the next halving (in 2024) that $100k price tag might still pop up.
