3rd October 2024 > > BTC & the UK.

tl;dr

The price of BTC is proving resilient. UK civil servants are proving themselves resilient against progress.

Market Snap

Market Wrap

BTC briefly threatened to breach the psychologically important level of $60k to the downside, but that price point was, in techie parlance, firmly rejected.

Curious Cryptos’ Commentary – BTC price action

The weakness in the price of BTC because of events in the Middle East has led some to claim that this proves that BTC is no store of value, certainly when compared with gold.

These naysayers are getting themselves confused, deliberately so or otherwise it is hard to know.

BTC is absolutely a store of value against the politically driven depreciation of fiat by using the printing presses. It is also subject to speculative flows in and out from those who have not taken the time to understand the crypto revolution, from those who are not real investors. These flows will tend to be momentum driven, and will exacerbate the direction of any price move.

Gold bugs like to make the claim that if you own gold, then you will always be able to buy food and shelter, even after the forthcoming zombie apocalypse. I mean, yes and no. Theoretically this is true, but owning bars of gold when there are gangs of roving bandits around may ultimately prove detrimental to your health. Pointing out that after the zombie apocalypse and the accompanying lack of electricity does rather make cryptos redundant doesn’t alter the fact that owning gold is a double-edged sword.

I would view BTC’s price resilience whilst Israel and Iran slip further towards all-out war as rather encouraging, but I might be a little biased.

Curious Cryptos’ Commentary – UK

Under the previous administration in the UK, cryptos were given short shrift by the politicians and the regulators. Rishi Sunak’s promise to make the UK a crypto hub had no more substance or commitment than most of his other promises. Roadblocks to crypto adoption were favoured over legislation to encourage crypto adoption in the UK.

Things might be changing though.

Tulip Siddiq, City Minister, has floated the idea of introducing the sale and distribution of gilts (UK government debt) using blockchain technology. This is a no-brainer, for it would simplify and streamline the issuance of gilts, and the proof of ownership. Rafts of middlemen will lose their administrative role, lowering the cost of UK debt, and lowering the cost of capital for all industry in the UK. Countries that are the first to adopt this approach will gain advantage over the laggards. Tulip recognises this fact, and is to be applauded for it.

However, the Financial Times, unaware that Kamala Harris has taken personal responsibility for ending the political divide either in favour or against cryptos, gleefully reports that the DMO (Debt Management Office) has no interest in this proposal. The DMO is staffed by career bureaucrats who don’t understand the concepts of competitiveness, technological advancement, or much else about the real world out there. Laughably, it claims to achieve value for taxpayers’ money, of which it has zero understanding, for otherwise it would not be furiously selling sub-par gilts bought during the last round of QE, incurring tens of billions of pounds of losses for us as taxpayers. Losses that are far greater than the so-called “black hole” which is itself a mere rounding error in the annual £2.5 TRILLION of UK government expenditure.

I wish Tulip all the luck in the world. The inertia of our civil servants has proven too great an obstacle to fostering innovation amongst the technocratic elite in the past. If Tulip succeeds, I will be very pleasantly surprised.