Blockchain currencies in 2023: If You Held On for Dear Life, It's a Merry Cryptomas!
It's Merry Cryptomas, everybody! Bitcoin is up 167% year-to-date. Ethereum is up 91%. If a massive crypto rally was one of your predictions for 2023 a year ago, I take my hat off to you. Compare those returns with other asset classes. The NASDAQ is up 36%. The S&P 500 is up 19%. Gold is up 10.7%. If you were long oil or a broad basket of commodities, you are down 10%-12%.
A year ago, many of us thought — I certainly did — that it was game over for crypto and that the naysayers were going to be vindicated.
Sam Bankman-Fried had blown up. (That part didn't surprise me.) He's now in jail, having been convicted of seven charges of financial fraud, and his exchange FTX is long gone. The fate of rival exchange Binance hangs in the balance, following an investigation by the Justice Department. Its founder, Changpeng Zhao, has pled guilty to money-laundering violations, stepped down as CEO and agreed to pay a $50 million fine, while Binance itself has been fined $4.3 billion.
By this time last year, the reputational storm engulfing crypto exchanges had convinced me that the entire edifice of blockchain-based finance was rotten and that I should immediately sell most of the bitcoin (BTC), ether(ETH) and other tokens I had acquired since becoming a convert to crypto back in 2017.
I was a fool. I had forgotten rule No.1 of crypto investing: Once you have bought the stuff, you should always HODL — hold on for dear life.
It is a sign of how wrong I was to SATB (sell at the bottom) that Nouriel Roubini — who a year ago was gloating at the demise of all “shitcoins” — is now (you've guessed it) launching his own blockchain-based “flatcoin.”
The more profound lesson of the last 12 months is that the crypto exchanges — or other custodial
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