Bitcoin's Rally Masks Uncomfortable Fact: Almost Nobody Uses It

Even a quick look at CoinMarketCap shows you that there's something a little odd about the current rally.

Look at the volume column and you'll see that Tether has more volume than bitcoin and has had for a little while.

Tether has recently

a) Admitted that they don't have 1:1 backing in USD

b) They use customer funds for investment rather than just storing them and

c) They're currently under investigation by the New York Attorney General.

Against that backdrop they've increased the number of Tethers in circulation by $400 million in the last month...

Now it's possible that they've got a load of companies who really believe in them to the point that they're eager to invest in Tether (even when there are other 1:1 backed stablecoins available)

A different interpretation could be that Tether have worked out they can effectively just print money as much as they want and are using this to buy bitcoins, driving up the price...

>Bitcoin has proved remarkably resilient over the last 10 years.

What does that even mean? Resilient in what way? As this article notes, it hasn't been adopted for use in any meaningful or significant way. It's a speculation vehicle. I guess in the sense that it didn't literally disappear it's resilient, but beyond that the idea from its early days that it would fundamentally change the world and be widely adopted is gone. It's not the glorious dagger that will pierce the heart of the statist beast its libertarian boosters imagined. The governments, banks, and people of the world have mostly shrugged at it. Ironically, some banks and governments even started adopting the technology for their own uses.

It's just a vehicle for speculation and a toy that doesn't seem to have any actually useful applications that couldn't have already been done better.

>I think it would be a mistake to ignore the progress that's being made.

What progress? It made some speculators rich but is otherwise useless.

I think Bitcoin pushes a lot of people's buttons because it was so new, exotic and difficult to understand that it really challenged a lot of people who consider themselves smart. I know I didn't "get it" right off the bat but I couldn't shake the feeling that the fact that I didn't understand it was a signal that something special was going on. So I kept pushing forwards. I read the whitepaper and thought, this seems cool but I still don't get it, something must be here. So I read more books (Mastering Bitcoin by O'Reilly is amazing). Finally I got it, understood the potential and realized just how amazing these concepts were. Unfortunately at that point the price had already risen to the point where I couldn't just buy hundreds of these things. I bought a few and now that looks like a freaking amazing investment.

During this story arc, I also witnessed a growing dissent against Bitcoin. A lot of it came from the media and tech adjacent people but not technologists themselves. Initial complaints were more or less ad hominems (money for filthy nerds), as the currency went up in value, the story morphed conveniently to an ecological one as the rebuttal for that requires deeper knowledge of crypto and an acknowledgement of the energy consumption used to secure regular money.

Now you get on HN and it's just hated. Passionate hate. I figure it's a mix of people that could have understood it and didn't until it was too late, people who still don't understand it, and people who don't like it due to the constant barrage of negative media coverage.

Resilient as in despite 10 years of continuous doomsday prognostications, Bitcoin continues to be traded and used around the world. And 1 BTC, this thing that didn't exist 10 years ago, is now worth $8,422.40 USD.

As for utility: I've used it to pay contractors in Europe, for example, without having to figure out which money transmittal service is going to rip me off the least. Tons of expats living in North America and Europe use it to send money back to family in their home countries. People use it to hedge against runaway inflation caused by poor monetary policy.

It could all fall apart in a few years, sure, but it's damn interesting. Being cynical just means if you're right you get to gloat about it, but if you're wrong you're missing something that could be really important.

I have little doubt BTC price is being manipulated.

Its price was kept very low for the longest time so some very powerful organizations such as Bakkt (backed by the same people behind NYSE) could accumulate most of its market supply. At the moment the price is being artificially pumped up to build momentum until enough people from the public buy into it, then its price will once again start dropping faster than gravity.

You often can attribute the exact reasons why a stock price went up, but for BTC it seems to be a complete mystery black box that even the most well-versed traders couldn't tell you the exact reasons why it went up.

For stock price for example, you just knew in advanced even from last year that Beyond Meat's stock was going to be a hit. "What The Health", an anti meat industry and pro vegans documentary film, was a HUGE success last year and you could see from miles away everything was set up for this trend to become mainstream in 2019 as public sentiments were beginning to swing very positively towards it. For BTC however, everything just seems like a wild guess as no one could pin point exactly what drives its price.