CRYPTO CRASH: Bitcoin Price Plummets, Is bad Government Regulations To Blame?
From its peak last november, the feds interest rate hikes inflation and recession. Fears have caused the stock market as a whole to tumble, and things show no signs of getting better any time soon. Joining us now to weigh in is one of our favorite crypto commentators associate editor at reason magazine liz wolfe welcome liz thanks for having me. So what is causing this uh market volatility right now? Can you impact that a little bit for us who are not so crypto savvy? Absolutely i mean weve been in a period of extreme crypto hype. We saw this with the degree to which traditional investors really flocked toward crypto the degree to which coinbase really caught on i mean tons of americans now have coinbase accounts uh. It really permeated the sort of discourse. We even saw this with nfts, and this sort of like moment when, like justin bieber, was buying into board ape nfts like years ago, maybe even just three years ago. This is not something that had any sort of mainstream purchase and in the last year or so we have seen it really uh gather and garner a lot of popularity. So i think some of this volatility is going to be normal and i think people panicking and trying to exit is probably the wrong approach. Yeah i saw uh sagar and jetty former host of this show and breaking points he tweeted anytime. I see a story about how bitcoin crashed to 30 000.
I i cant even believe it because i was sharing moon memes at like 9, 000 and 15. I was losing my mind so his point being like, like even the when it was much less than what it is now even after having crashed. It was still a really exciting thing, so we should keep that in perspective right, yeah. Well, one thing that i think is really interesting is like the timing of this is especially bad, because this comes on the heels of coinbases regulatory filing, which brian armstrong, the ceo of coinbase, was talking about a little bit on twitter, but i think the the regulatory Filing basically said something along the lines of in the event of coinbase this intermediary. This exchange declaring bankruptcy, uh customers cryptocurrency may not be protected. The way that a traditional bank would protect customers funds if they declared bankruptcy. A lot of this is a function of the regulatory framework within the way the us government treats crypto exchanges, its a very green territory and so theyre treated differently than banks are. But i think a lot of people saw this coupled with coinbases sort of slightly depressed earnings reports and said: oh god, the crypto bubble is bursting everythings crashing. What theyre missing from this is that the coinbase executives have been preparing for this type of thing. For a long time, this is a standard regulatory filing um. This is part of why coinbase has really been amassing really massive cash and crypto reserves to prepare for events like this and to ensure their customers safety and its also like one of the reasons why customers need to be considering the trade offs very closely.
Because when you decide to put your cryptocurrency into an intermediary that faces regulatory scrutiny like coinbase, you are necessarily compromising some of the security of those funds. You can always put your cryptocurrency in an offline wallet or a more private wallet, but fundamentally what youre doing is youre, making a trade off for the sake of ease and convenience, and so coinbase customers are slightly less protected than more savvy and more um. Ultra tech minded sort of like offline crypto users and so thats, not thats, not a bug. Thats, not a problem with cryptocurrency thats, a problem with the intermediaries that people are flocking toward yeah were hearing a lot more. I think interest from people on capitol hill from political figures in what is the right approach to regulate, crypto and or or does it need to be, like you know, destroy thats what some i think political leaders want. I think that would be bad crypto isnt, going away its a promising and interesting technology to to foster a greater sense. I think, of privacy on the internet in financial transactions. So, if its going to be regulated, it has to be regulated carefully and delicately. You know what are: are you seeing in the future with respect to how congress is going to approach this technology? I think congress is approaching it in a very clumsy and foolhardy way, and i understand why right like this is something thats incredibly buzzy right now and i think a lot of people look at the crypto space and they see crazy, crypto bros and they sort of See theres an implication, theres a strain in a lot of this discourse that almost assumes that crypto is some sort of get rich quick scheme and people are entering with the expectation of getting crazy unheard of returns.
You know 20, 30, after merely a year or two years of being invested, thats, not how any part of our economy works. Uh. You know thats thats, really not. You should always be very skeptical of those types of claims and you shouldnt count on them, and that also applies to the crypto space, where people are peddling a lot of that type of thing. But none of that means that cryptocurrency or the technology that its built on blockchain are in any way um. You know pointless or foolish or the sort of province of crazy people. These are really valuable technologies and, i think, were beginning to test use cases for them and trying to figure out whats the best way to apply them. Part of the problem is when you invite more government regulation and scrutiny um. You know we have a lot of legislators who are trying to write laws and they dont actually understand uh how cryptocurrency space operates. They dont understand how a lot of these things function. We have a gerundocracy filled with 70 and 80 year olds, im, not sure theyre really super attuned to whats going on, and we see them crafting really bad regulations as a result of that. Well as im in my im, 36 and im, not sure i understand really whats going on, but i i hear a lot of people saying things like you know. This is a ponzi scheme, its very suspicious and untoward that you have all of these celebrities.
Whove never said much in the way of anything about finances, suddenly going on late night shows to hawk their ape nft, the matt damon commercial, commercial and then this is why people are suspicious that it seems like theyre, very affluent people who are getting into this and Coming out unscathed, while the you know the proletariat is left holding the bag. What do you say to people who say this is evidence that this is in fact untoward and something akin to a ponzi scheme. Yeah i mean, i think, its worth, noting that the rich people, if they are heavily invested in it, theyre not going to come out unscathed if they, you know give in to the panic uh pulling out moment that were in um. I i take that criticism very seriously, though the idea that this is a highly hyped space and that a lot of the people who are boosting it might not necessarily know what theyre boosting or the implications of the technology. As i see it, you know i have a decent amount of crypto and i have a coinbase account, but the thing that im really interested in other than you know getting richer because of my cryptocurrency is what other uses do we have for blockchain technology? I see this as something that has potential to reduce friction in like real estate transactions um and within our legal system, to do a better job of indicating in an unfalsifiable um and very quickly, verifiable way, basically using these ledgers to ensure that peoples claims of ownership Are legitimate? I see this as something that can really cut down a lot of the friction and the middlemen that we see within sectors like the real estate industry, so im interested in thinking about blockchain technology.
Not just as this thing that, like undergirds, dumb board ape nft stuff um, though i understand why thats appealing to people, i dont think thats, really the ultimate liberatory use of this type of thing. So when people are pedaling that you should be a little suspicious well liz, thank you so much for breaking that down for us. We really appreciate it. Thank you. Coming up al jazeera, reporter shireen abu akla, was fatally shot yesterday by israeli forces, allegedly in the occupied west bank.