Nearly one year ago, I shared a handful of predictions about cryptocurrency’s prospects in 2019. At the time, I mostly focused on crypto-linked financial products, including the long-awaited bitcoin ETF. But while the majority of my predictions about the financialization of crypto came true, there’s one notable story my crystal ball didn’t reveal: the growing role of large social media players.
Nearly one year ago, I shared a handful of predictions about cryptocurrency’s prospects in 2019. At the time, I mostly focused on crypto-linked financial products, including the long-awaited bitcoin ETF. But while the majority of my predictions about the financialization of crypto came true, there’s one notable story my crystal ball didn’t reveal: the growing role of large social media players.
The story of 2019 has been Facebook $META’s cryptocurrency Libra, announced in June, and its many missteps. I hardly could’ve predicted the ZuckBuck, let alone the PR saga that followed.
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Libra’s wobbly beginnings took many by surprise—and quickly caused outrage. Policymakers accused Mark Zuckerberg of trying to create his own money, ostensibly to compete against the traditional financial system. And while Facebook has stood by a 2020 launch date for Libra, it seems the chances of the digital currency going live are dwindling. (Of course, even if Libra doesn’t launch, the company’s financial aspirations are clear: Facebook is already expanding its other payments services, such as WhatsApp Pay.)
Mirroring Libra, there hasn’t yet been a digital currency revolution on the global scale, either. Central bank digital currencies (CBDCs) have been a relative nonstarter. As world citizens, we must take seriously whispers about China’s digital yuan, but to date, the greatest evidence of CBDCs has arrived in the form of Venezuela’s petro crypto and the Marshall Islands’ very questionable national crypto. Realistically, broad-based crypto money—government-backed or otherwise—remains a pipe dream.
As we look ahead though, there are two major trends worth following: 1) the slow unraveling of ethereum, the second-largest crypto project, and 2) the seeds of decentralized social media, currently being explored by Twitter $TWTR and others. Jack Dorsey, Twitter’s CEO, has funded decentralization research and open-source development of bitcoin (via Square $SQ, his payments company), nodding to a vastly different future for the web.
Regardless of whether these visions—distributed online platforms and deflationary, non-government currency—take hold, it’s clear that Twitter and Square are anticipating and responding to social changes. Before any of you complain that Dorsey’s late to the game, I’ll remind you: It doesn’t matter who starts, it matters who finishes.
Right! As of writing, the US Securities and Exchange Commission still hasn’t approved a bitcoin ETF. As the stock market regulator worries about bitcoin market manipulation, it seems unlikely to sign off on any financial vehicles to enable further speculation. For what it’s worth, even without an ETF, bitcoin rebounded almost 80% this year—jumping from $3,850 on Jan. 1 to $6,870 at the time of writing.
Partially right. So, I can’t give myself full credit for this. But in the first quarter of 2019, privacy coins like Grin and Beam were all the rage. Since then, it seems interest has tailed off. And based on price alone, I don’t deserve more than half-credit. Zcash has dropped nearly 50%, from $57 on Jan. 1 to $29 at the time of writing. *Grimace.* But Monero has remained fairly stable—$48 on Jan. 1 to $46 today.
Wrong, so far. Admittedly, this was my most bullish prediction and I whiffed. Although ether futures haven’t come to market in 2019, there’s a good chance it will happen soon. My assessment was simply a bit premature. Earlier this year, the chair of the Commodity Futures Trading Commission even said ether futures in 2020 were “likely.” And if there’s one person to trust, it’d be him.
Right again! I saved my favorite prediction for last because, well, it’s a doozy. In addition to the Ethereum Foundation’s Virgil Griffith being arrested for allegedly helping North Korea evade sanctions, the project has endured yet another tough year. What matters is that ethereum’s claims of a new, decentralized internet are, well, essentially nonsense.
I’ve been reserved in my criticism, but ethereum’s most recent debacle is laughable—developers built in an “Ice Age” mechanism to slow the network and incentivize themselves to upgrade it (to Proof of Stake, an alternative issuance model). But in the latest network update, they forgot to push back the “Ice Age,” so now they have to update again. This could’ve killed ethereum, but all’s well that ends well, right? Right?!
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Please send news, tips, and blue skies to [email protected]. Today’s Private Key was written by Matthew De Silva and edited by Katie Palmer. Real power can’t be given, it must be taken.
