This is a fascinating piece written for the believers of Bitcoin as a money doubler. 2018 was expected to be the year hodl (not selling Bitcoin) would have taken many young Africans to the big money club. But the year turned out to one to forget as Bitcoin crashed from close to $20,000 to about $4,200 it is presently trading.
Yet, despite my skepticism on crypto as a money doubler, I do think what Facebook plans to do with cryptocurrency is the way to go. You use it as a currency it was designed to be and not as an investment asset that keeps growing. That distinction is critical if one wants to understand many use applications of blockchain and cryptocurrencies especially the stablecoin flavors.
This time last year, people gathered around the dinner table for the holidays and avoided discussing politics by explaining cryptocurrency to each other. Digital tokens and their various schemes were exploding after a year of steady gains, reaching a precipice on December 16, when bitcoin hit a high of $20,000.
Heading into the new year, virtually everyone believed in one way or another that cryptocurrencies and blockchain technology had a bright future. For masters of the universe like Chase CEO Jamie Dimon, the talking point changed from “bitcoin is a fraud” to “blockchain is real.” Mid-level Wall Street traders were suddenly excited to engage in futures betting for or against bitcoin. Thomas Lee, head of research at Fundstrat Global Advisors and someone mainstream finance analysts paid attention to, predicted and kept predicting that bitcoin would hit $25k. And John McAfee still has a bet going that bitcoin will hit $1 million by 2020—he’s promised to eat his own genitals if he’s wrong. And no predictions could top the run-of-the-mill enthusiasts who simply screamed “hodl” (meaning don’t sell) because it’s all going “to the moon.”
It did not go to the moon.