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I Wanted to Blame My Job for Not Buying Cryptocurrency
As a (somewhat pretend) financial journalist, such speculative behavior is frowned upon. But the truth is, I never would have bought Bitcoin. Because I was too foolish.
Ten years ago, when my financially savvier friends started investing in cryptocurrency, I thought they were idiotic. I believed at the time that you couldn't buy anything with it. When that assumption proved wrong, I then thought virtual currencies were overvalued. When that assumption was also shattered, and the cryptocurrency winter arrived, I believed Bitcoin was doomed. Now, with Bitcoin's price nearing $100,000, I have to admit that I was not only foolish but repeatedly so. Despite my former colleague Niall Ferguson reminding me multiple times that spring always follows winter.
However, Even I Can Predict This Surge
When political influences shape the market, I feel more at ease making predictions. With a cryptocurrency convert being sworn into office this month, flanked by a cryptocurrency enthusiast (also the richest person in the world), and with the Treasury, SEC, Commerce Department, and other agencies set to be led by cryptocurrency lovers, even I can predict this continued surge, right?
Or maybe I'm foolish again.
Cryptocurrency Enthusiasts Are Embracing 2025 with Great Anticipation
"Cryptocurrency enthusiasts are greeting 2025 with great expectations," writes Andy Mukherjee. "They donated $135 million to President-elect Trump and dozens of successful congressional campaigns, hoping for unimpeded access to the global banking system and an end to SEC litigation against the industry. A strategic reserve dedicated to Bitcoin would be the icing on the cake. However, don't be surprised if the actual outcomes are less free than expected."
Marcus Ashworth and Mark Gilbert also explain the reasons behind this. "Trump's election has brought uncertainty to US policy, making trade, regulation, and cryptocurrency more unpredictable," they write. "While American consumers continue to buck the trend, supporting the steady development of the world's largest economy, economies in other parts of the world are relatively weak. Our core view for 2025 is: Buckle up; it's going to be a rollercoaster ride."
What Lies Ahead for Bitcoin?
Cryptocurrency may experience many ups and downs in the coming year. "The Trump administration is expected to be more accommodating to cryptocurrency proposals seeking formal recognition as a valid store of value, and this may become a reality under the leadership of incoming SEC Chairman Paul Atkins," explain Marcus and Mark. "Although it is unlikely that the US will establish a Bitcoin reserve—an idea floated during Trump's campaign and dubbed in a Bloomberg editorial as potentially 'the biggest crypto scam yet'—the regulatory environment will almost certainly become less hostile. However, the link between digital currencies and any fundamentals resembling the value of their real-world counterparts remains very weak, or even nonexistent—making any attempt to predict at what level Bitcoin will trade futile."
The biggest crypto scam to date? It seems the editorial board has found an even bigger scam: Tether.
"Tether has survived numerous disasters to become the preferred stablecoin in the cryptocurrency world. Despite practices that should have triggered a traditional bank run—such as actually lending the dollars of its holders to an insolvent affiliated crypto exchange—it has endured," the editors write. "What has been the outcome? Many problems have arisen. Some almost laughably villainous characters—including Russian arms dealers, Irish gangs, North Korean hackers, and Hamas—have used this stablecoin to transfer billions of dollars."
Enter the man who sold $99 digital trading cards to voters last year. "Trump's victory has dramatically changed the outlook for Tether," says the editorial board. "The combination of Trump and Tether could bring considerable potential problems. Notably, first, Tether's expansion, taking on more risks and establishing more connections with Wall Street firms like Cantor, increases the risk of a cryptocurrency crisis spreading to the broader financial system. Second, Tether's resurgence could significantly expand opportunities for illegal activities, undermining the government's ability to combat crime, terrorism, and enforce sanctions."
Aaron Brown is an optimist about cryptocurrency, but even he believes the situation is only "marginally better." "The industry has made considerable progress," he says. "In 2014, many believed Bitcoin and other cryptocurrencies couldn't survive, and their underlying blockchain technology was niche technology for certain specific applications. In 2018, most people believed cryptocurrencies weren't going away but also couldn't bring about a social revolution like the internet. In 2022, the question became whether the industry could integrate with existing regulatory and financial markets or survive as an illegal alternative akin to the dark web."
After Summer Comes Winter, and After Winter Comes Summer
So, will cryptocurrency become mainstream or continue to exist as an illegal force? "2025 will largely determine the answer to this question," Aaron says. "There is reason to believe that the cold war between crypto innovators and governments will end, allowing capital to flow more freely between traditional finance and crypto. Bitcoin and those 'respectable' crypto projects supported by major venture capital firms and traditional financial institutions may see a day in the sun, while projects led by 'two girls in a garage' and hackers, anarchists, and libertarians in the shadows may still thrive in the shadows but perhaps no longer be targets for law enforcement. This will drive further appreciation in Bitcoin."
Regarding the libertarian perspective, Tyler Cowen believes: "Stablecoins will continue to grow in the US payment system and abroad as more institutions want to be able to conduct dollar transactions. While the Federal Reserve will worry about the evolution of monetary institutions beyond its control, Trump's crypto-friendly administration will celebrate this innovation. The role of the dollar as a reserve currency will be strengthened."
So, it seems that cryptocurrency will go mainstream in 2025, unless it infects the entire financial system. It will reach some compromise with regulators, unless it turns into the dark web. The US may establish a Bitcoin strategic reserve, unless it doesn't. Trump will take Tether to new heights, unless a group of comical villains pull it down. Given these pending questions, the upcoming critical year for cryptocurrency may mean my decade of caution wasn't so foolish after al
