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Crypto's Dark Night
Crypto is passing through a dark night of the soul, with several high-profile funds teetering on the brink of failure.
At the same time, signs keep emerging of a broader transformation in the world’s economy.
Let’s take a look at the big crypto shakeup, and what it could mean for the Global Financial System.
Crypto's dark night
Multiple big crypto funds have been pushed to the brink of insolvency.
The first alarm was the collapse of Terra Luna and its algorithmic stablecoin TerraUSD in May.
As a result of the fund failures, folks are wondering about the possibility of contagion with other firms, similar to the 2008 financial crisis.
Speculation has been running wild about who's next to go down. Even if the bleeding stops, this has still been an especially punishing stretch for crypto.
Elon acknowledged the dark times with a multi-layered tweet.
This time is no different.
Speaking at a tech conference on Tuesday, Bill Gates took the opportunity to bash crypto as "100% based on some sort of Greater Fool Theory."
On Thursday, Bloomberg reported a lawsuit against Elon, SpaceX, and Tesla for allegedly participating in a "Dogecoin Crypto Pyramid Scheme."
The lawsuit, filed by an individual investor, hilariously seeks $258 billion in damages, plus an order blocking Elon and his companies from promoting Dogecoin.
The suit is destined to fail. Elon's support of Doge is legitimate, legal, and beneficial to humanity.
Saturday night, he reassured the DogeArmy that he wasn't going anywhere, and even said he's buying the dip!
Reports of crypto's demise are (and have always been) greatly exaggerated.
Each time the market has dipped in the past, quality projects have returned stronger than ever.
For now, the bigger question is not whether crypto will survive, but rather if it's a canary in a coal mine signaling a broader financial shakeup.
There's an argument to be made that crypto's downturn is symptomatic of economic turbulence to come, with signs popping up in a few different spots.
A big one is the Fed. On Wednesday, the Federal Reserve raised interest rates by 75 basis points, its largest single increase since 1994.
Over the past several months, the Fed has been raising interest rates to try to tame inflation, which hit a 40-year high earlier this month, with the cost of food, gas, and housing on the rise.
The 75 point rate hike is an admission that inflation is a bigger problem than previously claimed.
Higher interest rates make it more expensive to borrow money, incentivizing saving over spending.
A decrease in consumer demand could bring prices back to earth. However, it also risks driving the economy into a recession.
Signs of a slowdown are showing up in housing.
Just in the last week, powerful economic decision-makers dropped hints about a broader financial shakeup, one that could usher in a greater role for crypto than ever before.
On Friday, Fed chair Jerome Powell told a conference, "Rapid changes are taking place in the global monetary system that may affect the international role of the dollar in the future."
Powell made the comment while acknowledging that the Fed may create its own digital dollar, or CBDC.
On the other side of the world, Vladimir Putin told the St. Petersburg International Economic Forum that he expected "truly revolutionary, tectonic changes in geopolitics, global economy, the technological sphere, in the entire system of international relations."
Digital money is part of that change. The Head of Russia's Central Bank recently said that crypto can be used for international settlements such as gas purchases, while the third-largest oil producer in Russia moved ahead with plans to mine Bitcoin.
Since WWII, global monetary policy has been built around the dollar.
The war in Ukraine, and resulting financial sanctions, have changed that in the blink of an eye.
Taken together, Powell and Putin's comments suggest an economic order undergoing major revisions at an already fluid moment in history.
When Elon posted this meme in 2020, it looked like a joke.
Two years later, the global financial system is undergoing a profound transformation, and Dogecoin is a legit top-10 crypto with a stronger brand and brighter future than ever.
Was the meme a prophecy?
Will the dollar standard be replaced by the dogecoin standard?
Can Superman survive cryptonight?
Dogey Treats: News Bites
Starship will be ready to fly in July, when its first countdown will likely take place. Elon tweeted, "For the first time ever, there is a rocket capable of establishing permanent bases on the moon and Mars" and posted a picture of the rocket. The FAA granted approval to SpaceX to launch.
Christine Brown, formerly of Robinhood, said Dogecoin deserves credit for onboarding people into crypto.
In a meeting with Twitter workers, Elon said he wanted to make Twitter more inclusive, user-friendly, and profitable. He addressed the topic of aliens during the meeting, saying he had yet to see proof of their existence. Project Veritas released chat transcripts of. Twitter employees reacting. On Saturday, he posted a poetic tweet about his interest in Twitter, explaining, "This is where/the writers are,/Of past,/Present,/And Future."
Kraken crypto exchange CEO Jesse Powell tweeted an explanation of his company's new policy on bringing activist politics into the office. Elon said it was a "good thread."
Elon tweeted "Wow" in response to a story about a USA Today journalist who was fired for fabricating stories. He continued to warn about population collapse, saying the last two years had been a "demographic disaster." He also tweeted that he'd cast his first vote for a Republican ever when voting for Texas congresswoman Mayra Flores. He added that he was leaning toward Ron DeSantis for President and was considering starting a "Super Moderate Super Pac" for centrist candidates.
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Disclaimer: This is not financial advice and I am not a financial advisor. The article above references an opinion for entertainment purposes only and it is not investment advice. Always assume that the author of the article is actively trading and that the opinions expressed may be biased towards the author’s holdings. Do your own research and consult with a licensed financial adviser before making any investment decision. Do not treat any opinion expressed in this newsletter as a specific inducement to make a particular investment. Content, news, research, tools, and securities symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or cryptocurrency or to engage in any particular investment strategy. The information provided is not warranted as to completeness or accuracy and is subject to change without notice. The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, are not guaranteed for accuracy or completeness, do not reflect actual investment results and are not guarantees of future results. All investments involve risk, losses may exceed the principal invested, and the past performance of a security, industry, sector, market, cryptocurrency, or financial product does not guarantee future results or returns. Dogecoin is a speculative and highly volatile asset susceptible to pump-and-dump schemes.
At the time of publication, Dogecoin is around $0.05 per coin.