Today, we examine two viewpoints from two noteworthy figures regarding crypto. One is Wall Street notable Thomas Lee, a fund manager who co-founded Fundstrat Global Advisors. The other is a name you’re probably familiar with: Binance CEO Changpeng Zhao, colloquially known as CZ.
Both say some things we agree with, and some we don’t necessarily. Let’s start with the person “less relevant” to the crypto sphere.
Lee says nobody made money in crypto in 2022, but…
In an interview with CNBC, Lee harkens back to something we remind our readers of on an almost weekly basis, and that is 2018. Now, truly old crypto investors might argue that prior years were worse because there was even more perceived chance of it disappearing, and maybe.
But the fall from late 2017-early 2018 is going to be a difficult one to match. Bitcoin’s jump to $19,000 and then fall to $3,000, thereabouts, had every negative sentiment you couldn’t hope for and more. No reassurances should be necessary if crypto demonstrated it can bounce back and turn that level into support within three years.
Why hasn’t the crypto winter hindered institutional investors from the DeFi market? This brings us to our disagreement with Lee, so to speak. Whether one made money in 2022 from crypto is a matter of perception. In 2018, when things looked as bleak as ever, institutions were buying, investing and starting projects. Things are no different now. These institutions, as well as any dip-buyer, will wind up being the ones to make money off of crypto in 2022. Though based on past experience, it seems just HODLing is enough to achieve the same thing.
CZ dares tread where few have by questioning regulation… kind of
CZ visited Greece to speak about crypto, and one of the things he spoke about was of course the road ahead. What is the future of crypto? Right now, regulation is again the talk of the town, but what does it look like? Here is the part where we both agree and disagree with CZ:
“I think most governments now understand that adoption will happen regardless. It’s better to regulate the industry instead of trying to fight against it.”
Here’s the thing nobody seems to want to admit: we already have regulation. Has the SEC not slapped the wrist of some million startups and companies so far? What is this mythical regulation we keep hearing about that is coming, will fix things, and change how crypto is used? We wondered last year when the White House came out with its framework. We wondered this year when the White House came out with its framework. We’re still wondering.
CZ is right on a few things, of course, and raises some interesting points. He says no regulation or clampdown is going to hinder crypto adoption meaningfully, which is true, or crypto wouldn’t still exist and thrive in China.
He compares FTX’s collapse to the financial crisis of 2008. That’s a bit of an odd thing to say since the global markets themselves are gearing for a financial crisis worse than 2008. Crypto’s woes are largely due to it, and if it worsens, won’t crypto once again be treated as the isolated bad actor?
CZ also said that countries will start to diversify their holdings with cryptocurrencies such as Bitcoin, especially if they have no real sovereign. This is a thing to watch indeed. Fiat currencies right now find themselves on the shakiest ground in… well, 15 years as the absolute minimum. 150 isn’t a massive stretch if we take all banknotes into account. We don’t really believe, not officially so, that countries will turn to hoarding crypto because it will be a concession of defeat.
They’re already conceding it by hoarding gold bullion during a futuristic era when it’s supposed to be irrelevant. Crypto, which was meant to replace fiat from the ground up, would just worsen things for central bankers. But if it does happen in wealthier countries, it will probably go down as the most bullish thing to happen to crypto to date.