“Those who say bitcoin is completely useless are completely wrong,” began Financial Times journalist Jemima Kelly, in an Alphaville article published on April 1st. “[It’s] the currency of choice for people buying drugs, arms and other illicit things.”
And so this week began like any other week, with pundits taking potshots at crypto. We’ve heard it all before.
Whatever. Ms. Kelly, the FT, and mainstream media outlets, are too busy for mere facts. Bitmain cancelled its IPO; Ether is losing its lustre; Bitcoin will be condemned to the flames. Stay on message: crypto is a crumbling pipedream. The charlatans who missed the ICO bandwagon are flogging their half-baked ideas on eBay. The rats are deserting the sinking ship.
The bitcoin boom
Maybe the heckling could have continued, had it not been for that thoroughly inconvenient surge in the crypto market on Tuesday. Suddenly everyone was checking their wallet balances again; Google searches for ‘Bitcoin’ doubled; people wanted to know what was behind it.
Alastair Marsh, who covers cryptocurrencies and blockchain for Bloomberg, was first on the scene. The “unexplainable Bitcoin rally” may have begun with an April’s Fools article from Finance Magnates – an “obscure crypto website“ – which claimed the SEC had finally approved the Bitcoin ETF. The story goes that bots mistook it for a genuine story, began mass-buying bitcoin, leading to a sudden surge in the price.
Despite the fact that most crypto news outlets had already begun to suggest more realistic causes, media outlets lapped up the idea that a bogus article could create a $30bn boom. “April Fool’s joke may be behind Bitcoin price spike,” declared the Telegraph. “Bitcoin price explosion may have been spurred by an April Fool’s joke”, chortled the Independent’s Anthony Cuthbertson.
The best came from Business Insider. Underneath an image of a grotesque clown – the personification of crypto, apparently – one exasperated “market participant” told a smirking correspondent that “you literally can’t make this stuff up.“
The message is clear: it may have been a humorous article which caused the market to move, but it’s crypto which is the real joke. Where else would fake news cause titanic prices surges? What did you expect from a ragtag collection of anarchists, geeks and cowboys? Leave finance to the experts; go back to your hovels.
Of course, the April Fool’s hypothesis only had so much mileage in it. CNBC quickly discounted it as a “wacky” theory. As Crypto Briefing has suggested, it looks like what really lay behind the rally was Bitcoin breaking through a key resistance level, which sparked a series of short stops and executed high volumes of entry buys, accelerating the trend and taking Bitcoin up to the $5,000 mark.
It’s not an irrefutable theory, but it’s a damn sight more realistic. The mainstream media quietly dropped the April Fool’s narrative and started asking whether this was the beginning of a long-term trend.
But rather than speaking to experts or investors, the FT lifted comments from Reddit – that wellspring of truth and balanced opinions – to give the impression that crypto holders were either over-excited ‘moon-boys’ or mopey trolls who had probably been burned in the 2017 rally.
In their quest for truth, the BBC’s hip new ‘Sounds’ team spoke to an academic who believed Bitcoin was a symptom of populism, as well as David Gerard, who began his deluge with the refrain that Bitcoin only had value because “other people will want to buy it.“
Dinosaurs and the media
“Do you know what we call opinion in the absence of evidence?” asked the late Michael Crichton, author of Jurassic Park. “We call it prejudice.”
Maybe Jurassic Park is a good analogy. Imagine that the mainstream media is a six-ton bull Tyrannosaurus, and cryptocurrencies are the small children stuck in the car. They’re safe so long as they don’t move. But as soon as they do, the T-Rex lifts the car up with its powerful, bone-crushing jaws and flings it down a steep ravine.
Criticizing the mainstream coverage of crypto – even the term ‘mainstream media’ – seems like some sort of Trumpian, ad hominem attack against anything I don’t like. But it’s really not supposed to be.
Like everything else, cryptocurrency has to be subject to scrutiny, but it has to be fair scrutiny. Journalists that don’t take the time to learn about crypto, and assume it’s some sort of jokey-scammy asset do a disservice to themselves, their papers, and their profession.
In other words: we don’t mind cryptocurrencies, as long as they remember their place in the food chain. It works at the moment because crypto is a young, relatively small asset-class.
The reality is that news outlets will have to evolve, if they want to survive. Humans may not be as big as the dinosaurs, but we all know which one went extinct.
The author is invested in digital assets, including BTC which is mentioned in this article.