Bitcoin, in case you haven’t heard, is back. The premier cryptocurrency hit an all-time high of $73,794 last week, in the midst of a months-long rally following widespread pronouncements that cryptocurrency was “dead.” Spurred by both the long-time-coming SEC approval of the first Bitcoin ETF and a flood of pro-crypto money into the political system, cryptocurrency has resurfaced in the public imagination to an extent not seen since the days of Larry David and Tom Brady hawking it during the Super Bowl. Even amid the triumph, there have been continual reminders of how fickle any speculative market tends to be: The volatile, novelty-based memecoin market continues to invite scrutiny, and Sam Bankman-Fried still can’t seem to stay out of the news. The devout have continued to believe in crypto’s promise all along not just as a get-rich-quick scheme, but as a vehicle for financial independence from traditional markets and data surveillance. For them, this year’s rally has become an opportunity to take a long-delayed victory lap — often, as it turns out, on the graves of bygone platforms like Bankman-Fried’s FTX. “The recent Bitcoin rally was built on the solid foundation of the collapse of FTX, Celsius, 3AC, and other firms who engaged in dangerous or fraudulent practices,” said Steven Lubka, managing director at the Bitcoin firm Swan. “This new capital has come from brokerage accounts and advisors, who present a much more stable base to the market than what was flushed away in 2022-2023,” he continued, projecting a bull run into 2025 “at least.” Lubka’s comments are typical of the optimism that powers institutional Bitcoin. But what’s different now, compared to the hype- and scandal-ridden era to which he compares today favorably, is that the institutional crypto ecosystem has matured far beyond just, say, SBF’s (alleged) polycule moving in secret behind various subsidiaries. The new suite of ETFs, an expanded presence for crypto on the Hill, and the fading memory of the industry’s various scandals has given newfound credibility to crypto companies’ claims to be doing something beyond just helping speculators make a quick buck. “The primary driver of price action at the moment is likely the massive and consistent inflows of billions of dollars of funds into the newly launched Bitcoin ETFs, a process that is just getting started,” said Alex Gladstein, the crypto-loving director of strategy at the nonprofit Human Rights Foundation. Gladstein predicted that the upcoming “halving” of Bitcoin, or the process by which the rewards users reap for adding blocks to the blockchain is greatly reduced, would lead to another spike in its price and drive further development of the software and policy ecosystem around the technology. (Gladstein’s organization promotes crypto as what he called “freedom money,” or a tool to skirt the surveillance of authoritarian regimes.) But with an increasing market share, of course, comes increasing scrutiny. Sometimes that overlaps with politics, as crypto becomes an increasingly partisan issue — with Republicans promoting a vision of crypto-powered financial freedom and eyeing government-sponsored central bank digital currencies warily, while Democrats stake out ground as consumer defenders on the lookout for hucksters and speculators. And SEC Chair Gary Gensler hasn’t gone soft on crypto despite the ETF approval, seeking out $158 million to enforce securities law in the market. Just as before, however, the biggest risks to crypto might come from within the market itself. Crypto’s major selling point is its “immutability” — a crypto token is as unique and irreplaceable as a gold bar, giving it a promise of security and endurance that crypto’s boosters say “fiat money” (i.e., the U.S. dollar) lacks. But sometimes that can be a drawback: Bloomberg’s Matt Levine covered in his newsletter yesterday the (seeming) downfall of “Slerf,” a memecoin on the Solana blockchain whose entire value developer “Slerfsol” just happened to eradicate in an instant. “Guys I fucked up,” the developer wrote on X. “I burned the LP and the tokens that were set aside for the airdrop. Mint authority is already revoked so I can not mint them. There is nothing I can do to fix this. I am so fucking sorry.” In other words: I pressed a button and all your money’s gone, sincerest apologies. As Levine pointed out, “If a company just lost its list of shareholders, it could probably, like, go back through its emails and reconstruct the list.” But this is not how crypto works: That very “immutability” that its boosters tout can also lead to irreparable losses from innocent error, fraud or a cyberattack. Luckily for bereft Slerf investors, and much like the crypto market itself, they got a second chance. Leveraging the crypto community’s thirst for novelty, the increased attention led to a 5,000 percent spike in the coin’s value at its next issuance. The wacky ups-and-downs of various memecoins might seem a long distance away from the staid world of ETFs, high-dollar lobbyists, and global human rights, but the fundamental technology remains the same.
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