TECH Why I'm Bullish on Bitcoin and Stablecoins, Not Crypto
Bitcoin's back above six figures and stablecoins are about to get an actual legal framework. None of that makes the average crypto project any less of a scam.
A mate sent the Bitcoin price into a group chat this week, mostly to wind me up about still insisting the number itself doesn’t matter, and I checked more out of habit than curiosity and found it sat exactly where it’s been for weeks, $112,000 in May and the low $100,000s for the whole back half of June, and for the first time since a stranger on a forum paid 10,000 coins for two pizzas in 2010 and got a fair trade by the standards of the day, I don’t think the price is actually the interesting part of this story.
The ledger, not the hoodies
Bitcoin is a ledger, copied across far more machines than any single company could plausibly control, that issues a maximum of 21 million coins on a schedule that’s been public since 2009 and hasn’t been changed once, and once you strip away everything built on top of it, that’s the whole pitch, scarcity you can verify yourself, without asking a bank or a government to vouch for it. Everything else riding on that idea, the ten thousand knock-off tokens, the JPEGs of bored-looking apes, the coin named after a dog that a different, funnier dog later got its own coin for, is a seperate industry wearing the same jacket, and treating it as the same bet is the first mistake most people make, myself included for about the first year I paid this stuff any real attention.
Where stablecoins actually fit
A mate flagged the GENIUS Act’s 68-30 Senate vote in the same group chat and asked whether that changed anything, and rather than just replying with an opinion I went and actually read the bill summary, which is how I ended up thinking the boring bit is the point here. The US Senate passed the GENIUS Act on 17 June, giving dollar-backed stablecoins an actual federal framework for the first time instead of a patchwork of state licences and vibes, and a stablecoin done properly is a token backed one-to-one by real reserves, usually short-term US Treasury bills sat in an account somewhere, so that one coin is always redeemable for one dollar. What that gets you is a way of moving dollars over the internet at three in the morning without a bank in the middle taking two days and a fee to do it, which might be the least exciting sentence I’ve written about money, and also, now I’ve sat down with the actual mechanics rather than the headline, the reason I think it’s the part of this industry that sticks around.
The scams are their own, separate problem
None of that excuses FTX, which is usually the first thing anyone brings up when I say any of this out loud, and it’s worth being precise about since it wasn’t a stablecoin failure or a Bitcoin failure at all, it was a company that took customer deposits and lent them to a related trading firm without telling anyone, and its founder is currently serving a 25-year sentence for it. Ordinary people are also still being talked, over weeks and sometimes months, into moving their savings into an app by someone they’ve never met, a pattern with a grim official name now, “pig butchering,” because the con artist spends the early weeks fattening up the relationship before the slaughter, and neither of those two, current, real problems is an argument against a ledger that issues 21 million coins on a fixed schedule, any more than a Wall Street Ponzi scheme is an argument against the existence of a stock exchange.
Whether a reserve-backed stablecoin issuer is actually holding what it claims to hold, on any given day, is something I can’t verify from where I’m sitting, and neither, as far as I can tell, can most of the people currently writing enthusiastically about GENIUS Act compliance, which is the bit of this whole framework I’d want nailed down properly before calling any of it solved.
Where I think this actually goes
Forbes ran the numbers on a $150,000 Bitcoin by the end of the year this week, on the basis that ETFs and corporate treasuries are absorbing supply faster than miners are releasing it, and for once I think the mechanism holds up better than the number usually does in these pieces, since you can’t have this much of the available supply getting locked into ETF wrappers and company balance sheets and expect the price to just sit still. I wouldn’t put money on the specific figure, but I’d put money on the general shape of the argument. My own guess, from someone who still isn’t buying a JPEG of an ape, is somewhere in that region by the turn of the year, and I’ll let whoever’s still in that group chat remind me if it doesn’t.