• Skeptics take the price drop as an opportunity to criticize crypto again
• Crypto entrepreneurs Nazarian and Allaire are encouraging the industry
• Bitcoin & Co. still well below record highs despite recovery
Crypto investors have had to endure a lot this year. Not only that, the market capitalization of the entire cyber currency market fell from 2.4 billion US dollars to just 1.1 billion US dollars at times and multi-million dollar crypto companies such as the popular Terra Tokens UST and LUNA, the lending platform Celsius or the hedge fund Three Arrow Capital (3AC) tore into the abyss.
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Rather, the crypto fans also had to endure the malice of long-standing crypto critics such as Charlie Munger in particular. The 98-year-old recently added to his previous criticism by saying that the players in the crypto business are either “delusional or evil”. In addition, it is “crazy to buy this stuff” (meaning Bitcoin, editor’s note).
Nazarian and Allaire encourage counteroffensive in crypto industry
Two well-known crypto CEOs propose a solution against such allegations as well as against the price crash. Adelle Nazarian, chair of the crypto company American Blockchain PAC, and Alex Allaire, co-head of the American Blockchain Initiative, call for a mission against the crypto enemies in a comment on “CoinDesk”. “In order for the crypto winter to end and for the crypto sector and America to prosper in the long term, the crypto economy must rise to the challenge posed by its ardent critics. These critics are actively working to undermine our viability.” wrote the two crypto entrepreneurs. The critics used the Bitcoin & Co. price drop to “double their attacks”.
Nazarian and Allaire’s call for the crypto offensive reads: “Make no mistake. The opponents of the crypto sector are formidable. To steal a meme: The Empire Strikes Back. Time for Return of the Jedi!” But how exactly should “Return of the Jedi” be designed? Amidst the sector-wide crisis, how can the crypto community turn the mood around and bring more optimism back?
The two crypto entrepreneurs appeal: Crypto fans must be more “active”
The two commenters encourage readers to do more for digital currencies: “We need to advocate for cryptocurrency in public relations and in politics. We, the authors, actively advocate for cryptocurrency and call on others to advocate for it. The case for cryptocurrencies is immense: innovation and growing productivity – and the accompanying rising tide of equitable prosperity.” Apparently, the crypto winter, which is currently slowing down innovations around blockchain, NFT and crypto payments, cannot shake Nazarian and Allaire’s positive long-term expectations.
Crypto critics on the up: Munger, Buffett, Gates & Co.
After their plea, the two tech entrepreneurs quote the most well-known crypto critics. The goal of these so-called “enemies of progress” is to “nullify this historic wave of innovation,” say Nazarian and Allaire. Munger is one of the most famous “enemies of progress”. Bill Gates. The Microsoft founder said in May that Bitcoin “contributes nothing to society.” A similar view is shared by Gates’ longtime friend Warren Buffett, who bemoaned what he saw as a lack of productivity in cyberforex at this year’s Berkshire Hathaway annual meeting. For this reason, the star investor from Omaha, Nebraska does not own any cryptocurrencies and prefers to rely on company shares.
Sophisticated strategies are required instead of blind provocation
Nazarian and Allaire reject an overly clumsy counterattack. They consider the tactics of tech investor Peter Thiel, who insulted Buffett as a “sociopathic grandfather” in April, to be ineffective. Rather, the crypto offensive would need to take a more nuanced perspective while also naming potential problems in the sector. Ethereum co-founder Vitalik Buterin could serve as a role model. Buterin does not represent blind crypto optimism, but in a “Fortune” interview pointed to the real dangers that were clearly revealed by the Terra LUNA crash: “I think that the collapse of LUNA is in a way one of these important , Healthy Moments in the Crypto Economy that reminds people that the downsides are real. You can’t just build a system and magically pretend the negative case will never happen.” Nazarian and Allaire also see advantages in the Terra Crash, because capitalism is based on “creative destruction”. Accordingly, the entire industry learns from the mistakes of insolvent companies, which ultimately drives progress. In this way, the crypto industry could even benefit from the Terra crash in the long term.
This is how it is with Bitcoin & Co.
Meanwhile, the major cryptocurrencies have all recovered from their lows for the year, which they hit in mid-June. At a current price of $24,130 (as of August 11, 2022), bitcoin is well above the level of about two months ago (minimum $17,630 on June 18, 2022), but still 66 percent below the record high of November 10, 2022 at $68,925. The second largest cryptocurrency, Ether, which is currently trading at $1,891.02, is miles away from its previous high ($4,865.81 on November 10, 2021). However, the high correlation between tech stocks and the crypto sector is still striking. Last but not least, the future performance of cyber currencies will also be related to the development of growth stocks. The latter, in turn, always react very sensitively to interest rate hikes by the central banks. The crypto community will therefore certainly pay a lot of attention to the words of Fed boss Jerome Powell in the following interest rate decisions.
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