Cjump off Cockroaches’ brains don’t function. Cockroaches can survive for about a week without a head. There is no guarantee that you will be able to hit them. Their flexible exoskeletons can bend to withstand up to 900 times their body weight. Flushing it down the toilet is also not a solution. Some breeds of dogs may hold their breath for 30 minutes or more. For most people, cockroaches are unwelcome pests. Their existence is further exacerbated by their indestructibility.
An unwelcome pest is how much financiers and regulators talk about the crypto industry. Criminals use virtual currencies to launder money. Terrorists use them for payment. The hacker demands a ransom in Bitcoin. Many crypto coins are simply created for their creators to make money off of.
This industry also appears to be indestructible. Due to the rise in interest rates in 2022, the price of virtual currencies has plummeted. Industry heads cut off: Chao Changpeng and Sam Bankman Freed, founders of the world’s largest and second largest cryptocurrency exchanges, are currently awaiting sentencing for financial crimes (financial Awaiting sentencing for crimes (money laundering laws and fraud, respectively). Regulators are cracking down. But cryptocurrencies not only survived, they are soaring again. Bitcoin rose from just $16,600 at the beginning of the year to a nearly two-year high of $45,000 on December 11th.
what is happening? First, indestructibility is built into the technology. Bitcoin, Ether, and other coins are not companies. It won’t go bankrupt or shut down. They employ blockchain to maintain a database of transactions. Those lists are verified by a decentralized network of computers that are incentivized to keep the list maintained by the promise of new tokens. The entire architecture will only collapse if the tokens reach zero. And there are still many reasons to believe that some crypto tokens are worth more than nothing.
The first is that holding crypto assets is a bet on a future where the use of the technology becomes widespread. People in autocratic countries already use Bitcoin and stablecoins (tokens pegged to hard currencies such as the dollar) for savings and, in some cases, payments. These could potentially be used more widely. Artists and museums still create or collect non-fungible tokens (NFTs). The same goes for people trying to tarnish your image. Donald Trump is selling pictures of himself for $99 each. He plans to cut his reserved suits into pieces and give them to attendees who have purchased at least 47 cards. NFTRuns in a single transaction.
During the boom, the cryptocurrency industry raised a lot of money and hired a lot of smart developers. Those that remain are working on new uses such as social media applications and play-to-earn games. They will probably never be widely adopted. But even if the chance of success is slim, it’s worth it.
The second reason is that with each boom and bust cycle, it becomes clear that cryptocurrencies are not a bubble like the tulip mania of the 1630s or the Beanie Babies craze of the 1990s. Bitcoin is a volatile asset, but its price history looks more like a mountain range than a single mountain, and appears to be closely correlated with tech stocks. However, the correlation with the broader market is only moderate. Assets that move up and down out of line with other assets people have in their portfolios can be useful diversifiers.
Bitcoin’s establishment as an important asset appears to be responsible for its recent surge. In August, a US court ruled that the Securities and Exchange Commission, the country’s main market regulator, rejected efforts by investment firm Grayscale to convert a $17 billion trust invested entirely in Bitcoin into an exchange. The court ruled that the decision was “arbitrary and capricious.” Trade fund (ETF). Doing so would make investing in Bitcoin easier for the average investor.
In October, the court upheld the judgment, effectively seconds to give way.The biggest fund managers such as BlackRock and Fidelity have also applied to launch. ETFs. Given the returns Bitcoin has historically provided and its correlation with other assets, even prudent investors may be hesitant to invest a portion of their pension pot or portfolio in cryptocurrencies for diversification. As a result, there could be a rush of cash into Bitcoin.
Many people instinctively feel disgust when they find a cockroach. However, despite its shortcomings, this insect has its uses, converting decaying matter into nutrition and feeding on other pests, such as mosquitoes. Cryptocurrencies also have uses such as portfolio diversification and securing funds under autocratic regimes. And, as has been shown, it is almost impossible to kill. ■
