Bitcoin rallied. What Are True Crypto Believers Still Smoking? | Nils Pratley

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As fraud and conspiracy charges were brought against FTX founder Sam Bankman-Fried in the United States on Tuesday, a funny thing happened to the price of bitcoin: it rose.

Since bitcoin is still a handy barometer of sentiment throughout the crypto universe, one has to assume that more than a few punters have seen the headlines about one of the biggest frauds in American history, the Attorney General. American Southern District of New Yorks description of Bankman-Frieds alleged crimes and decided it was time to refuel.

Bitcoin has further plunged in value by nearly two-thirds this year, it must be said. But it’s also up about 10% since plummeting when FTX filed for bankruptcy in mid-November, which is extraordinary. You have to ask yourself: what are true crypto believers still smoking?

A popular narrative says that a few crashes (to grossly underestimate the importance of FTX failure) are simply to be expected in the early years of a decades-long financial revolution. The weird trading exchange might go pop but, hey, the most popular digital tokens should survive. And, when regulators eventually impose a few rules in the Wild West of cryptos, traditional respectability will be assured, the theory goes.

This joyous rotation seems delirious. Whether Bankman-Fried is doomed or not, FTX looks like an existential event for crypto trading fad. As real-world means of exchange for goods and services, none of the digital tokens have managed to take off, aside from their use in terrorist financing, tax evasion, and sex trafficking, such as the JP Morgan chief executive Jamie Dimon said on CNBC last time. the week.

As stores of value in times of inflation, the idea of ​​digital gold has failed. And they bring in no income, of course. This leaves cryptocurrencies as tools of pure speculation, a pitch with limited appeal if it is proven that FTX is missing $8 billion in client assets.

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Yes, the firm whiff of regulatory discipline may eventually force the creation of exchanges with proper governance structures that follow know-your-customer rules and do not interweave their operations with hedge funds or lending vehicles . By then, however, it is suspected that the get-rich-quick team will have moved on. Tulips were big until they weren’t.

The underlying blockchain-based technology should always have useful financial applications, it’s generally obligatory to point this out, but the Bankman-Fried downfall feels like the moment adult thinking reenters the coin. Crypto is a complete sideshow and crypto tokens are like pet rocks, Dimon also said last week. It was a boring and conventional thing for the boss of a big bank to say, but also surely correct. A new asset class, as we usually use the term, has not been created.

Good luck buyers and holders of $18,000 bitcoin, but you have (still) been warned.

A big idea blooms from small energy savings

A saving of 2.8 million is tiny in the context of the many billions more that UK households will spend on energy this winter, but good ideas can have small beginnings. National Grids requires flexible service, the program to encourage us to use our dryers and other appliances during off-peak hours is one such innovation.

The company, as the power grid operator, was content to conduct a series of limited trials to establish that the flexibility configuration works this way with a small number. But consumer response seems to have exceeded expectations; and the fact that a million households and businesses have signed up to take part in a wider rollout suggests there is a desire to save a few pounds.

From the perspective of the networks, the arrangement consists of shifting demand to meet supply. There will clearly be limits to the amount of balancing and adjustment that can be achieved in practice, and the work of putting financial incentives in place may prove to be more art than science. But it all sounds like an explosion of common sense, as well as a little throwback to the horribly expensive deployment of smart meters.

It’s just a shame it took an energy crisis to make it work. Good national insulation would bring a much greater improvement in energy efficiency, of course, but this is not the opinion of Grids.

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