It seems like the world of cryptocurrency has come back from the dead. Bitcoin is once again trading around $50,000, NFTs are selling at record volume

Price Rules Everything Around Me

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2021-08-26 22:30:08

It seems like the world of cryptocurrency has come back from the dead. Bitcoin is once again trading around $50,000, NFTs are selling at record volumes, and payment providers are continuing to expand their crypto services. For crying out loud, images of pet rocks are selling for over $1 million.

What is going on here? Was there some revolution in cryptoland that I missed? Did the world suddenly wake up, break out of its pattern of denial, and realize our collective crypto future?

Now that I’ve seen this cycle play out multiple times over the past few years, I’ve come to realize something simple, yet profound:

What I mean is that prices are what drive our narratives around asset classes, not the other way around. It’s not that crypto actually had a revolutionary change in the past month and then prices moved accordingly. Rather, prices went up and now people are attributing that change to some fundamental change in the space.

This is why it is misleading to say that crypto “died” when prices plummeted a few months ago just like it’s misleading to say that crypto is “back from the dead” now that prices have partially recovered. No, crypto didn’t lose 50% of its utility 3 months ago and then re-gain that utility recently. What really happened was that the price changed. That’s most of the story.