Cryptocurrency is here to stay

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In recent weeks, everyone from CEOs to Wall Street fund managers to federal governments has weighed in on cryptocurrency. We’ve certainly heard the skeptics: JP Morgan Chase CEO Jamie Dimon called Bitcoin “worthless” (this, of course, despite the fact that it will allow JPMC customers to continue buying crypto through the JPMC trading desks. Don’t worry, Jamie. We still love you.) Doomsday economists warn that cryptocurrencies threaten global financial stability. Perhaps most importantly: the Chinese government has banned all cryptocurrency transactions within the PRC.

On the flip side, the love for Bitcoin, the largest cryptocurrency by market cap, continues to grow: Cathie Wood of ARK Invest. The special committee of the Brazilian Chamber of Deputies reports that Brazil wants to make Bitcoin legal tender, as El Salvador did last summer. In other words, a country of over 212 million people could soon allow its people to buy anything from a bed to a Bentley to a Big Mac with Bitcoin.

When you look at the increase in the value of a single Bitcoin, the hype is certainly understandable: The price of a Bitcoin, as of this writing, sits just over $ 60,000, not all the way. is as high as its all-time high of over $ 66,000, but still a substantial jump from a year ago when its market value exceeded $ 11,000. For every person who says Bitcoin is “worthless” or lacks intrinsic value, someone else is projecting when Bitcoin will hit $ 100,000. Even a million dollars. These numbers suddenly don’t seem so crazy anymore.

Well, here’s my take on cryptocurrency: I think the US Federal Reserve, or the Fed, should buy $ 500 billion worth of Bitcoin and put it on its balance sheet.

You read correctly. The Fed is expected to invest half a trillion dollars in crypto.

OK, full disclosure: I have been a long-time investor in cryptocurrency, including, but not limited to, Bitcoin. I am also part of a cryptocurrency mining company called BitNile. BitNile has currently allocated over $ 40 million to a data center that we believe will house 1,000 S19J pro Antminers and we intend, under certain conditions, to increase that number to less than 4,000 by now. July 2022. While there are certainly speculators and dynamic players out there, I am here for the long haul. I wouldn’t say any of this if I didn’t believe that cryptocurrency will represent the kind of disruptive force that is changing the way we do so many basic transactions in our lives.

This is why, yes, I sincerely believe that the Fed should invest in cryptocurrency.

Is this likely to happen? Probably not. But here’s why it should be: It’s an opportunity for the United States to be a leader in managing cryptocurrency in the global economy rather than waiting for someone else to come in. define the terms. I don’t see the Chinese government banning it as a sign that cryptocurrency is not a viable form of currency. Not at all. In fact, it’s quite the opposite: the Chinese government prohibits it precisely because it is a decentralized currency that it cannot control. But here’s the catch: that’s exactly what cryptocurrency is – something that cannot be controlled by a government. Chinese resistance to cryptocurrency validates why it exists in the first place.

Of course, it is certainly unfortunate that a population of over a billion people is taken out of the equation. That’s why I applaud SEC Chairman Gensler and Fed Chairman Jerome Powell for saying they have no plans to ban cryptocurrency here in the United States. They recognize that this is something that cannot be ignored or pushed back. The next step is to validate it by making a substantial investment in crypto within the US economy.

As for the regulations, I certainly think it needs to be done right away. The United States is expected to appoint a crypto-tsar who can determine how cryptocurrency sales will be reported and taxed. We need laws and regulations to protect us from, among other things, illegal dark web transactions and cryptocurrency ransomware attacks (as if these things never happen with government issued fiat currency or other assets). I’m not sure exactly what these laws and regulations should look like, but we certainly have the brains of this country to develop them.

Additionally, people need to understand that Bitcoin is not the only cryptocurrency available. Depending on your source, you will hear about thousands upon thousands of cryptocurrencies in circulation. All of this is not real. Many are scams or failed projects or simply created as a joke (Dogecoin, are you interested?). It’s just the nature of the free market. Regulation will help get rid of many of these impostors and failures. After all, there have been a large number of mainstream auto makers over the past century, but only a handful of conventional auto makers still exist; the electric vehicle market, just like cryptocurrency, is disrupting everything we thought we knew [internal combustion] vehicles in the same way). The same, I firmly believe, will be true for cryptocurrencies: those that actually offer some sort of utility and value to the world will be successful. The others will disappear. The world’s Bitcoins, Ethereums, and Cardanos are the ones that will still be standing after the smoke clears. It reminds me of all the internet companies that went into the early years of the web, bragging about how many “eyeballs” they captured. In the end, it turned out that a lot of these companies claimed to have more eyeballs directed at their sites than actually existed in the world.

That said, the general public certainly needs to understand what crypto is and how it works. This regulatory czar would also be someone who could help the public understand that cryptocurrencies are not securities that trade like stocks, be it Amazon, Microsoft, or whatever. known name, and that they are not really analogous to commodities or fiat currencies; they are all at the same time and yet none of these other assets. The cryptocurrency market is very volatile and prices fluctuate widely. Look at a chart of the price of Bitcoin from the start of 2020. To say the race has been bumpy is an understatement.

In addition, cryptocurrency and blockchain – the technology that drives it – are complicated. I was trying to explain Bitcoin to certain people in my world – smart people I care about – and watched their eyes widen as I spoke. It is not easy. I’m starting to talk about the idea of ​​a decentralized currency where transactions between people are recorded, not on a single ledger, but a global network of ledgers … or that there is a finite amount of Bitcoin, unlike what is happening with a central bank it can just keep printing money … and yes i lost them.

But there is always someone in the room who wants to get it, who wants to understand the fact that cryptocurrency transactions are much more secure than traditional transactions that occur, for example, from a bank or through a card. credit… or how crypto is so much more transparent than dollars because you can follow wherever a coin has gone… well, then they start to see the light. There is a lot of jargon in the crypto world; mining, mooning, hodl (“to hold out for life”), not to mention the legend of a man named Satoshi Nakamoto, and it will take work for John Q. Public to figure out what it is.

But of course, it’s also a generational thing. My assistant does not know a world without cell phones and e-mail. My kids give me strange looks when I give them money. They say, “put it on my Venmo,” like their time is more precious than mine. A whole generation of people will appear in the world in which cryptocurrency is part of their universe. I guess it is becoming as commonplace for them as the cell phone or the internet is for me now.

Despite the fact that this sounds like a start, the cryptocurrency revolution is already well advanced. You are already seeing NFL players getting paid in Bitcoin. Mark Cuban allows Mavericks fans to purchase merchandise with a variety of different cryptocurrencies. You can buy Starbucks products with Bitcoin. I’ve heard waitresses in Vegas take Bitcoin or have the QR code for crypto tattooed on their arms (seriously). Maybe regulators could have killed cryptocurrency five years ago, but now it’s too late. There is no stuffing of this genius in the bottle. This is why the lesson of a ban like the one in China is that the more you try to stop cryptocurrency, the more you justify why it exists in the first place. Hopefully the US government gets it. Because you know what? Cryptocurrency is here to stay.

Disclaimer: Milton “Todd” Ault, III is the Founder and Executive Chairman of Ault Global Holdings, Inc., a diversified holding company listed on the NYSE, including its subsidiary BitNile, Inc. Views and Opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Ault Global Holdings and / or BitNile, Inc.

Milton Todd Ault III

Todd’s specialty is acquiring undervalued assets and disruptive technologies that have a major global impact. As Executive Chairman and Founder of Ault Global Holdings which is listed on the NYSE American, under the symbol DPW. Todd’s businesses span a myriad of industries, including digital manufacturing technology, defense and aerospace, biotechnology, hospitality, business lending, and real estate. One of Todd’s biggest accomplishments is founding biotech startup Alzamend Neuro (NASDAQ: ALZN). Thanks to its license with the Byrd Institute at the University of South Florida, Alzamend’s first drug (AL001) is in clinical trials in humans and its second drug, (AL002), is expected to be tested in 2022. Todd is also founder and president of BitNile.

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