The Current State of Crypto is a weekly examination of events and market movements in the cryptocurrency economy.
Born out of a rejection of central bank powers and widespread government corruption, we were reminded this past week that cryptocurrency can never be separated from the realms of economics and politics. The inexorable ties between these worlds were once again reinforced with the arrest of Julian Assange in London. As the famed WikiLeaks co-founder and journalist was seized from the Ecuadorian embassy for the “crime” of journalism, the crypto world reacted to the greater implications of such a brazen, yet seemingly inevitable move.
The event serves as a stark reminder of the fundamental reasons for cryptocurrency’s existence as a money and information system that retains freedom and censorship-resistance. Just as journalism is intended to act as a counter-weight to corruption and government overreach, cryptocurrency can act as a balance against monetary imperialism.
Craig Wright, having left Twitter recently, returned to serve notice to his critics, issuing warnings of lawsuits against a number of influencers who have criticized the polarizing figure, accusing him of being a fraud for claiming to be Satoshi Nakamoto, the creator of Bitcoin. Amongst those accused of libelous behaviour are Hodlonaut (who has since removed his Twitter account), Peter McCormack, and possibly countless others who have joined in the chorus as various forms of Hodlonaut accounts, declaring Wright to be a fraud. Binance CEO, Changpeng Zhao, expressed his dismay regarding the situation, threatening to delist Bitcoin SV from the popular platform.
This threat to delist was met equally with enthusiasm and disdain; with many cheering and encouraging CZ to pull the plug on the controversial currency’s exchange listing. In the meantime, a host of critics expressed disgust that this single individual had the capability to have such an undue influence on what should be a decentralized and free market. A fundamental principle of free market economics seems to be forgotten here amidst the political sniping: that traders and investors should have the ability to choose whether to support or reject a cryptocurrency, rather than elite central figures.
The story has dominated crypto social media over the past few days, further dividing an already-contentious debate. If Wright continues to pursue the lawsuits as threatened, it seems inevitable that any court would at some point require hard evidence of Wright’s claim to be Satoshi Nakamoto. This could be proven through the simple means of signing a Bitcoin transaction from the wallet known to have been owned by the original creator of the coin. Creators of coins such as Charlie Lee’s Litecoin and Jared Tate’s DigiByte demonstrated a simple, non-dramatic example of this process.
Crypto market levels off
After a brief spike to $5,500, Bitcoin has settled back down to support around $5,000, with altcoins shedding a disproportionately larger share of market value and Bitcoin dominance creeping upward. Zooming out, it appears that Bitcoin could be standing at a precipice, with the possibility of a completed “Bart-head” sending values back down to $4,000. On the other hand, it is conceivable that, as many analysts seem to believe, the bottom is finally in and the market may continue its gradual climb out of winter hibernation to $6,000 and beyond.
In the long term, this difference will likely not matter, as the market will continue to recover and grow with spreading adoption and broader investor interest approaching on the horizon. But for those in the day-trading trenches, it’s a tough go right now with extremely unpredictable conditions and the high likeliness of more volatility in the near future.
It should be noted that all of these observations are just that — observations I have made about the market over the past week. This is not professional financial advice and is intended only to act as a quick examination of some of the week’s events for you to enjoy. Please do your own research before doing any investing and never risk more than you can afford to lose.