May the fireworks continue: three trends in Bitcoin that will strengthen in 2023
May the fireworks continue: three trends in Bitcoin that will strengthen in 2023
Nation-states adopting, central banks obsessing and Bitcoin maximalism rising. Here are three important trends in six short chapters.
As podcaster Peter McCormack has often observed, almost everything happening has a Bitcoin angle nowadays. This might not be surprising as Bitcoin is money and money runs the world, but it is surprising how quickly Bitcoin has moved into the centre of political controversy, both in national debates and geopolitical struggles. So here are six things that happened in 2022. Six things that’ll show up again in 2023 — but in different forms and featuring different people.
Ukrainians turned to Bitcoin
While the first European war since the 1990s is mostly reported as a geopolitical struggle, the toll for ordinary Ukrainians is immense. Whatever you think of Putin, Biden, or whoever is in charge in Europe right now (I have no idea): it's the poor souls in Kyiv, Odesa, and the rest of Ukraine who pay the highest price. One thing that helped soften the blow some was Bitcoin.
Cryptocurrencies have been used as a tool by Ukrainians who stayed behind, those who fled the country, and even the Ukrainian government. According to some surveys, Ukraine now ranks as the country with the second-highest crypto use worldwide. Of course, being a government, Ukrainian leaders didn't really approve of too much freedom for their own people and curtailed the use of crypto in order to prop up the local currency in April.
Russia floated the idea of accepting Bitcoin for oil
It was just a quip, a little side note, but it happened anyway. Under pressure from Western sanctions, Russia is exploring new avenues for international trade. And in March, for the first time in recorded history, a Russian official stated, that one of these avenues for trading energy could be Bitcoin.
“When it comes to our ‘friendly’ countries, like China or Turkey, which don’t pressure us, then we have been offering them for a while to switch payments to national currencies, like rubles and yuan,” said Zavalny during the press conference. “With Turkey, it can be lira and rubles. So there can be a variety of currencies, and that’s a standard practice. If they want bitcoin, we will trade in bitcoin.” (Bitcoin Magazine)
Now, three things are important to note here.
First: This is a big deal. A currency used to trade energy (oil, gas), is a serious contender on the international stage, regardless of politics. Second: Nothing has actually happened since, so we don't know if this was a serious statement. Putin himself dismissed the idea of Bitcoin-for-oil at the end of 2021, stating that crypto was "not ready yet". Third: Steps have indeed been taken to enable the use of crypto for foreign trade since then and even the mining industry has been legalised in Russia.
But — and this is a big but— as in Ukraine and other countries, Russia strictly forbids the use of crypto as a day-to-day currency by its citizens, fearing loss of control. What we see is a two-pronged approach where the state and the elite are allowed to use Bitcoin while the masses are not. This stinks. Of course, the use of Bitcoin is tough to stop, so this might be a losing battle. But it just shows that states and autocratic governments are no friends of free and open monetary systems.
The ECB developed an obsession with Bitcoin
Look, I get it. The Chinese are pushing their digital slavery coin (CBDC). The US is dominating reality with the Dollar. And poor little Europe is looking to carve out a niche. But the current Bitcoin-hating obsession the ECB is developing seems unhealthy. There are 3500 bureaucrats working in Frankfurt at the European Central Bank – but instead of finding ways to combat inflation, they spend their days threatening strike because of said inflation and, of course, bashing Bitcoin.
There where more than 70 articles published on the ECB website about how Bitcoin is "very bad, really very, very bad" – mostly by the same German authors who seem to hope for career opportunities in the field of digital slavery money (CBDC). I'm not going to link to any of it here because frankly, I'm already paying them with money while being forced to use their idea of "money" so I'm done giving them attention.
Luna collapsed
Yeah, that was a shit idea, wasn't it. Algorithmic stablecoin you say? 40 billion in perceived market cap gone within a few days. The darling of the 2021 shitcoin-bullmarket disappearing into thin air. I would laugh if it wasn't so sad.
FTX also collapsed
Yeah. That happened. SBF owns a suit. Who knew?
Bitcoin maximalism became a thing
As a result of shitcoins, shitcoin banks, shitcoin casinos and shitcoin funds collapsing left, many hardcore Bitcoin maxis where created in 2022. This runs against conventional "wisdom" that they might be a "dying breed". If anything, those who don't have time for other crypto projects were recognised by the mainstream this year. See this piece on Cory Klippsten and Bitcoin maximalism from the New York Times. Or this piece from the Austrian daily „Der Standard“ that features yours truly.
These three trends: nation state "adoption", central banks obsessing and the rise of Bitcoin maximalism will only get stronger in 2023. And God knows what else is waiting for us.
Good luck to all of you and thank you so much for subscribing to Fix the Money!!
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