Editor’s note: We’re trying a new format for our Friday crypto updates. We hope you enjoy the new look. And don’t forget that once a month, Vin will be writing about collectibles instead of crypto.
- As of this writing, bitcoin is up around 2% over the last seven days.
- Bitcoin rebounded quite nicely after briefly dipping below $39,000 on Monday.
- For the last 30 days, bitcoin has been trading in a fairly narrow range (for bitcoin) between $39,000 and $48,000.
- Ethereum is down about 1% over the last seven days, with most of the red ink spilled yesterday.
- For the last 30 days, ethereum has been trading between $2,900 and $3,550.
- Long-term holders outnumbering short-term sellers seems like the most likely explanation for these market dynamics.
What Vin Is Thinking About
In policy circles, creating a digital dollar is quickly becoming a popular idea. President Biden ordered his administration to investigate how the government would go about launching a central digital bank currency (CBDC) last month. Sen. Elizabeth Warren is aboard the CBDC train. Rep. Stephen Lynch has proposed that the Treasury Department run a full-scale test of a CBDC.
So why is establishment Washington rushing to embrace the digital dollar?
- It views cryptocurrencies and the digital yuan as a threat to the dollar’s status as the world’s global reserve currency. So it needs the digital dollar to fight that threat.
- It’s a cheap and cynical ploy to blunt popular (and business) interest in cryptocurrencies.
If Washington was serious about adopting the “best version” of the digital dollar, it would work something like this:
- Every person and business has a digital wallet.
- The government can put money directly into any wallet (Social Security, stimulus, pandemic payments, etc.). The government cannot take money out of a wallet without authorization (from the wallet owner or the court).
- Businesses can put money directly into the wallet (paychecks, benefits, etc.)
- Individuals can put money directly into the wallets of businesses, friends, families, etc.
- Surveillance is decentralized. So the digital dollar can be tracked with court authorization. But that data isn’t being proactively collected and analyzed.
That’s the ideal ecosystem. But it’s never going to happen. Why? Because it cuts out the banks.
Eliminating the middleman usually makes things cheaper and more efficient. The same would be true for the digital dollar. Money would move through the system more efficiently. And the system would be cheaper to use. It’s a massive win for everyone — except the banks.
Banks make hundreds of billions of dollars running the current inefficient system. They have zero interest in disrupting themselves. And the banks own Washington. So the best version of a digital dollar is just a pipe dream.
Instead, we’ll get a watered-down version of what the digital dollar should be. It will be an incremental change at best. Everyone will pat themselves on the back for “modernizing money.” And then they’ll question the need for crypto.
What the establishment doesn’t understand is that people don’t want an inefficient, watered-down system. They want something better. They want a system that works efficiently and that makes sense. They want something that is both digitally native and antifragile. They want the next generation of money, not a modest improvement to what we have now.
The watered-down digital dollar doesn’t address any of these concerns. Which means crypto is here to stay.
Crypto has its own dating show now. Don’t expect it to look like “The Bachelor” or “The Bachelorette.” It’s a low-budget show. And the most popular episode doesn’t even have 6,500 views (yet). But if you’re interested in the intersection of crypto, dating and reality YouTube, Proof of Love might be for you.
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