When establishment joins anti-establishment…
Groucho Marx once famously said, “I refuse to join any club that would have me as a member.”
I feel like this quote fits the tone of the crypto space during this era of odd mix between the rebellious cypher-punk underground that envisioned a paradigm shift in the economy and the suits of Wall Street and regulatory bodies now entering the space. It’s an uncomfortable collision of worlds.
It’s inevitable when larger amounts of money start floating around.
Ears suddenly perk up among those with the power and control of money under the current paradigm when figures in the millions and billions start getting bandied about. The anti-establishment atmosphere changes when “institutional” figures like Goldman Sachs, J.P. Morgan and the Rothschild’s start showing an interest.
It reminds me of this dingy nightclub some friends and I discovered hidden away in a dark alleyway back in the day. It was dusty and dirty, but kinda cool because hardly anyone seemed to know about it and it was a place that felt like it was ‘ours’. I remember returning to it some time later when new management had taken over, cleaned up the place and had successfully drawn in more crowds. It was more popular, but lost its appeal for us. It no longer had the niche appeal it once had when it was adopted by the masses.
Will cryptocurrency lose this appeal as bankers and wealthy Wall Street institutional investors join in the fray? It seems many are already not too pleased with the presence of the ‘enemy’ in their midst. Will the world of crypto get ‘cleaned up’ by ‘new management’ in order to draw in the crowds?
As we hope to see rapid growth to boost our meager portfolios, we may well be trading away the unique niche appeal that makes crypto special.
But I do have hope. For every Ripple or JPMcoin that gets created, poses as a cryptocurrency, and is actually owned and controlled by a concentrated group of wealthy central forces, there will remain more decentralized currencies like Bitcoin or Monero that simply can not be “taken over” by the institutional world (and if not those currencies, then others will spring up to take their place). The banking establishment knows about this distinction, but can muddy the waters to maximize profitability and control.
Yet it is this key characteristic — a currency’s ability to be decentralized — that will inoculate it against corruption by banks, governments, oligarchs, and billionaires. That’s not to say that Bitcoin or Monero are entirely decentralized, nor that their markets are not manipulated to a large extent, by a number of forces. Far from it. But the centralized manipulative tools of central banks and governments simply can not be applied to these currencies.
Again, it pays to be mindful of the fact that value is heavily manipulated in this space, particularly by those with large holdings. The trick is to avoid panic-selling to the big buyers. These entities will continue to happily accumulate while inducing volatile price movement designed to push casual traders out of their assets.
In the near future, expect more big money to continue entering the scene — but notice that much of it will entice buyers away from true cryptocurrencies, toward “digital currencies” that are centralized and directly held and manipulated by a few wealthy figures. Keep this crucial distinction in mind.