Bitcoin is Stable, and I Hate It

In perhaps the strongest sign that the market is maturing yet, Bitcoin has been less volatile than stocks for the past month.  While one month does not make a long term trend, it is an interesting development for the asset that is best known for its massive and sudden price swings.

This data came to us through eToro’s daily investment newsletter and was originally reported in Bitcoin Magazine. This comparison comes at a rare time of stability for bitcoin and an unusually volatile time in the stock market, so it should be taken with a grain of salt. Even still, both the author of the article, Michael Taiberg and eToro’s analyst Mati Greenspan see it as a positive development.

Tallberg sees it as a possible bottom to the bear market we have seen since the highs of late 2017. Meanwhile, Greensberg sees it as Bitcoin’s growth into a legitimate financial tool, suitable for hedging the traditional markets.

“The fact that the current stock market rout has not had any effect whatsoever (positive or negative) on the cryptoassets is an extremely positive sign. This is a prime example of how crypto’s are uncorrelated and it only serves to increase their use case as a powerful tool for asset management.”

And overall, there is no doubt that increased stability would be an improvement to bitcoin’s overall health and development as a worldwide currency. People will never use Bitcoin or any other cryptocurrency as their primary means of saving or spending, so long as it is more volatile than most other means of doing so.

But I’d like to take a moment to lament on the possible death of one thing that has made covering bitcoin so much fun for the past five years: the craziness.

It isn’t just the volatility, but that is a major part of it. Bitcoin is crazy, or at least it seemed like that all those years ago. We had wizard memes, and dogecoin NASCARS and public pump groups of various levels of scamminess and effectiveness. The entire idea of digital internet money that was not only not controlled by the government but impervious to any of their influence was crazy. It was crazy when I got into it in late 2013, it was even crazier in 2009 when it was invented. But now? Everyone knows about it. Even if they don’t understand it, they at least get that the magical internet money isn’t going away and it isn’t magical.

On Twitter, I am seeing fewer anarchists and cypherpunks and more Wall Street types. Fewer revolutionaries and a lot more squares. Like Punk rock’s growth from the 70s to 90s, it is now made up of people who have no concept of the philosophical drivers behind the movement a few years ago. It wasn’t that Bitcoin was in opposition to the governments and banks, it was that it existed outside of them and would exist regardless of what they thought of it. Bitcoin was never illegal, but it was certainly lawless.

Today we have people who wear ties and loafers to work every day, giving their best guess on when the SEC will give Bitcoin its blessing in the form of an ETF, itself an instrument of the old world. Whereas before we didn’t care what the banks thought of bitcoin. We assumed they hated it, or maybe laughed at it, but we certainly didn’t care if they liked it or used it. Bitcoin was coming to destroy them. The only feeling we wanted them to have was fear.

But the smart ones embraced it. How that will playout long-term has yet to be determined. But some are beginning to float the idea of being our bitcoin custodians. And the big players are throwing the term blockchain around like that word means anything when it’s not decentralized.

And I’m not even saying the current state is worse. It was inevitable, regardless of if Bitcoin ultimately destroys the banks or not. The smart ones were always going to embrace it in some way, in an attempt to either save themselves or to use their leverage in the old financial world to put them on top of the new one.

But the weirdness in bitcoin is dying out and that deserves to be eulogized. The volatility may, in fact, return someday soon. I still believe in the next great Bitcoin jump, perhaps several of them over the next decade and a half. But if the volatility truly is subsiding, that is one less fun thing we have in bitcoin, one less fun thing to write about, one less genre of Crypto war stories that used to populate every crypto gathering. I’m not even a day trader, but I’ll still miss it. It will also be, crucially, one less motivating factor to bring new people in. “Come to Bitcoin and make a buck in a minute” will no longer be true if there aren’t swings to make money on.

Of course, speculative investing has been the driving factor behind bitcoin’s price for years.  That had to come to an end eventually. It has to be used for something tangible to keep that value over the long term. So yes, this is good news. Bitcoin is growing up. Like a loving parent, I just wish it didn’t have to happen so quickly.