The crypto world is buzzing. If you ask true believers, they will say that this is just the beginning. Ask skeptics and they will swear we will watch the bubble swell in real time. A person who can pop up for any second.
Last week, I witnessed the excitement firsthand at a crypto event in Brooklyn. The bar is full. People are angry. It felt like a flashback in 2020 and 2021, when crypto heat made everyone catch everyone from retailers in their twenties to grandparents. At that time, it was all about Bitcoin, the glitz-like NFT like the boring ape yacht club, and any hopeful wild rewards. This is a digital casino where everyone wants to be rich. Quickly.
But then a crash occurred. “Crypto Winter” arrives, marked by the spectacular fall of crypto exchange FTX and its poster boy Sam Bankman Fried. Billions of dollars disappeared. Trust collapsed. Regulators hover.
Now? The energy is back. This is confusing.
In the Brooklyn incident, hosted by Wire Network (a startup that tries to connect to a different crypto system or “blockchain”), optimism is obvious. “There has never been a better time to be a crypto developer,” Co-founder Ken Dicross told me.
On paper, the cryptocurrency comeback looks unstoppable. The industry’s total market value has exceeded $3 trillion since the beginning of 2023. There are more and more companies like Robinhood, Coinbase, and MicroStrategy. Circle Internet Group, one of the largest “Stablecoins”, was published in June at a valuation of $6 billion. In just a few weeks, it soared to nearly $50 billion.
Wait, what is stable?
Stablecoin is a cryptocurrency designed to maintain a stable value, usually hanging on something like the US dollar. The idea is to provide people with the speed and flexibility of encryption without the wild price fluctuations of Bitcoin or Ethereum. In theory, you could use Stablecoins instead of cash to buy coffee or pay rent. Actually, we haven’t.
But the bets from cryptocurrency companies are clear: one day we will all use digital dollars instead of paper dollars. That’s what drives the gold rush today. The question is: Are people leading the way?
New Crypto Medal: Defi and Bitcoin Treasury Corporate
Most of the current hype is focused on Defi, shortening decentralized finance. It can be seen as an attempt to rebuild Wall Street without using a bank. The code is not a bank approve your loan or process your transaction, the code does so. There are no middlemen, no janitors. It sounds revolutionary, but so far it has been a playground for speculators and tech geeks.
Then there is the Bitcoin Treasury Company. These are normal businesses, they use bitcoin instead of dollar, euro or gold to load balance sheets. MicroStrategy is the kid of posters, spending billions of dollars on Bitcoin and transforming itself from a sleepy software company to a crypto package fund. The idea is that Bitcoin will outperform inflation and fiat currencies in the long run.
Bubble or prosperity?
There is no clear answer. These numbers are dazzling. The hype is real. However, there is still too much uncertainty about whether the huge promise of cryptocurrencies will match reality. Even as a crypto-friendly president at the White House, the road to changing cash or Wall Street is long.
So, is this a bubble? perhaps. Maybe not. It depends on who you ask.
