Macro Guru Raoul Pal Says There’s a 70% Chance Bitcoin and Ethereum Hit This ‘Shoo-In’ Price

Real Vision CEO and macro investor Raoul Pal is predicting that Bitcoin could more than triple in value from the current price, while Ethereum could nearly quadruple.

Pal tells his 695,100 Twitters followers that there’s more than a 70% probability of Bitcoin hitting $200,000 and Ethereum reaching $20,000.



“This is not a certainty. It is a probabilistic outcome. For me, $20,000 ETH and $200k BTC is a shoo in (70% + chance).

What outperforms and how this plays out is anyone’s guess…”

Pal says that currently, Bitcoin is replicating the price behavior it displayed in 2013.

“BTC continues to follow 2013 very well.”

Source: RaoulGM/Twitter

The Real Vision founder also says that there’s a “decent chance” that the current Bitcoin bull cycle could play out for a longer period than previous ones.

“I think there is a decent chance (not a certainty) that this BTC cycle extends longer in time and higher in price…”

Source: RaoulGM/Twitter

The macro guru adds that Ethereum could potentially even reach $40,000 by the end of the first or second quarter of 2022 if it follows the price behavior Bitcoin exhibited during the 2017 bull run.

“And ETH…bigger move…$40,000 by March/June would only be one standard deviation overbought versus trend.”

Source: RaoulGM/Twitter

When asked whether Ethereum could drop by 90%, similar to what happened in 2018 after the bull run, Pal answers in the negative.

“No. It will go down much less, IMHO (in my humble opinion)”.

Bitcoin is trading at $63,600 at the time of writing, according to CoinGecko, while Ethereum is exchanging hands at $4,140.

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Report: Over 3 Million Email Addresses of CoinMarketCap Users Leaked

Leading cryptocurrency price tracking platform CoinMarketCap (CMC) recently had email addresses of over 3 million users leaked.

According to a fresh report by a website that tracks several cybersecurity threats, including hacks and compromised online accounts, about 3,117,548 email addresses of CMC users were leaked on October 12.

However, the leak remained unknown until the email addresses were discovered on several hacking forums where they were being traded.

Coinmarketcap Confirms Data Leak

The report further revealed that the passwords to these leaked email addresses were not compromised in the hack.

Speaking on the matter, a CMC representative said:


“CoinMarketCap has become aware that batches of data have shown up online purporting to be a list of user accounts. While the data lists we have seen are only email addresses (no passwords), we have found a correlation with our subscriber base.”

The knowledge that no passwords were compromised by the leak brings a measure of relief to the affected users. Additionally, the absence of passwords could indicate that the attack on CoinMarketCap would likely not have been for a major heist.

However, the data leak has compromised user privacy and could give room for several targeted attacks on customers, including phishing.

Still a Mystery

The CoinMarketCap representative further revealed that the data breach was not from any of the site’s servers, and they are yet to identify the exact cause of the hack.

“We have not found any evidence of a data leak from our own servers — we are actively investigating this issue and will update our subscribers as soon as we have any new information.”

Not the First

Meanwhile, data leaks are not a new phenomenon in the cryptocurrency industry. Over the past few years, several crypto companies, including BitMEX, Ledger, and many more, have experienced similar user data leaks, jeopardizing millions of customers.

In late 2020, hardware wallet provider Ledger discovered that the personal data of several of its users, including email addresses, phone numbers, postal addresses, and more, had been leaked on various public forums.


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Is Hyperinflation Inevitable? Jack Dorsey Says It’ll “Change Everything”

When Square’s boss Jack Dorsey talks about hyperinflation, the world listens. And Twitter reacts. Since so-called developed economies are now feeling the pain that inflation brings, the concept is in everyone’s mind. Every human has a front-row seat to witness the consequences of the United State’s relentless money printing. And, since the Dollar is still the reserve currency of the world,  they’re all feeling it too.

Related Reading | Bullish For Bitcoin: US Inflation Expectation Breaks Out From Decade Long Downtrend

This is Jack Dorsey’s tweet:

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As you can see, he doesn’t merely talk about inflation. He goes for “hyperinflation,” which caused adverse reactions in the replies and the quoted tweets. They accused him of fear-mongering and quoted official numbers at him. And the nay-sayers probably have a point here, because the US is far removed from the reality that word implies. However, one thing’s for sure: money printer goes brrrrrrrr… and it hasn’t stopped working since Covid hit.

Negative And Moderate Reactions To Jack Dorsey‘s Tweet

This is an example of an unnecessarily insulting response from a traditional finance person. 

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This man has obviously not done his homework regarding Bitcoin, so his argument is invalid. And doesn’t require a response. Plus, he’s being insulting to get attention, which he got. So, good for him and his dopamine levels. Let’s hope he has fun staying poor.

This is a Venezuelan economist with a moderate answer to Jack Dorsey.

Since Venezuelans have first-hand experience with hyperinflation, let’s take what he says into account. The US is just feeling what inflation does. So-called developing economies live with that concept on their backs every second of every day.

BTCUSD price chart for 10/23/2021 - TradingView

BTCUSD price chart for 10/23/2021 - TradingView

BTC price chart for 10/23/2021 on Bitstamp | Source: BTC/USD on

Informative Reactions To Jack Dorsey’s Tweet

The Human Rights Foundation’s Alex Gladstein, a notorious Bitcoin maximalist, had this to say to Jack Dorsey.

He’s not lying. Hyperinflation is “already one of the world’s biggest humanitarian crises.” However, the US is far away from “Turkey, Nigeria, Ethiopia, Iran, Lebanon, Venezuela, Cuba”, and Sudan’s situation. And, since the Dollar is still the reserve currency of the world, they have a comfortable cushion to resist the constant money printing’s effects.

Serial entrepreneur and former Coinbase CTO, Balaji Srinivasan, answered Jack Dorsey with a fully-fledged idea. A “censorship-resistant inflation index.

In the project, he brings forth some hard truths:

“If inflation is a government-caused problem, we can’t necessarily rely on government statistics like the CPI to diagnose it or remediate it. Indeed, in places with high inflation, censorship and denial is the rule rather than the exception.”

If you are technically capable, there’s still time to send your proposal and earn “A $100k Prize for a Decentralized Inflation Dashboard.” Be aware that “if you use Chainlink’s oracle tech in your project, the best dashboard will be eligible to receive a $100k grant in LINK tokens.” Those tokens are in addition to the main prize.

Poor Understanding Of The Terminology

In a Twitter Spaces room specifically dedicated to Jack Dorsey’s tweet, notorious podcaster Preston Pysh concluded.

“I think people’s understanding of the terminology, deflation, inflation, is just grossly misunderstood. And so, when you say we’re going to have these deflationary events that are then going to lead to more QE, which is then going to result in more inflationary events. I completely agree with you, but we’re talking that there’s so much information loss in such a simple word as deflation and inflation. So the deflationary event is that this whole system is constructed as credit.”

When he says QE, Preston refers to Quantitative Easing, which Investopedia defines as:

 “A form of unconventional monetary policy in which a central bank purchases longer-term securities from the open market in order to increase the money supply and encourage lending and investment. Buying these securities adds new money to the economy, and also serves to lower interest rates by bidding up fixed-income securities.”

Related Reading | Jack Dorsey Plans to Build A Decentralized Exchange For Bitcoin

That being said, Preston asks:

“How many people in the US, or in the world, have that context when that’s not their expertise, right? They didn’t get a major in macroeconomics, or finance, or whatever. So, it’s just all buzzwords that people throw around. And, in the meantime, no one really even understands what those definitions even represent.”

For more information about inflation, check out the Bitcoinist Book Club analysis of Saifedean Ammous’ “The Bitcoin Standard.”

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How Bitcoin Fits Ivan Illich’s Vision For The Future


The work of Ivan Illich — ronin of the Catholic Church, “errant pilgrim,” and subtle, surprising and far-ranging social theorist — is experiencing a renaissance among many who worry that technology poses corrosive threats to human culture and well-being. A trenchant and unique critic of the Catholic Church in which he came up, Illich went on to critique many modern institutions, whose failures he saw as reflective of the failures of the Church.

Illich’s unique critiques of “industrial institutions” throw new light on our modern monetary system, and Bitcoin’s place within it. In this essay, I’d like to introduce how Illich thought about institutions and tools, apply that lens to our present-day monetary system, and finally, consider Bitcoin as an alternative.

Across a body of thematically linked work, Illich argued that our modern societies increasingly confuse large-scale and bureaucratic “institutions,” like those of “schooling” and “medicine,” with the goals they nominally arose to combat. In so doing, we commodify core aspects of our once-social being, and we cede individual and communal capacity to vast institutions with increasingly “radical monopolies” over the services they render and goals they claim to serve.

This consolidation into “industrial institutions” with “radical monopolies” over the services they offered disempowered both communities and individuals. This combined disempowerment and monopolization inevitably led to counterproductive institutions, which lost sight of, and began to undermine, their stated aims.

Schooling, the subject of Illich’s “Deschooling Society,” provides an example. Illich argued that “schooling” had come to be confused with “learning.” Learning was historically an individualized and active process, specific to each person’s needs and context — lifelong, communal, curiosity-driven and unconstrained. One learns naturally and without much explicit instruction: from one’s community, work, role models or autonomous engagement with the world.

This learning is inherently active, tailored, compelling and “vernacular,” or naturally absorbed: Think of language.

Schooling is fundamentally different. Once a component of broader learning, schooling supplanted other forms of learning. The global dominance of modern schooling — driven by well-meaning activists (and the Prussian army) and supported by government funding and the global export of an American “industrial” vision — replaced natural learning with institutional learning.

In this new model, Illich argued, time spent “in seat” at an institutionally accredited school — a metric of consumption of an institutional good — became the measure of “learning” achieved. This change elevated credentialism, and it made the open-ended, self-driven and practical model of learning vocationally impractical in competition with the institutional and consumerist one. Over time, this destroyed broader learning.

The new institutional schooling model was based on discrete units of imposed and uniform training consumed in an increasingly authoritarian setting. The very structure of this mode of education is antithetical to free thought, skepticism, risk-taking and creativity. Units of this product consumed predominantly reflect willingness and capacity to be “excellent sheep,” along with privileged institutional access.

Conformity to authority is central to the model and necessary for continued consumption. A public school teacher, Illich pointed out, has become a triplicate authority of moral, epistemic and civic judgment — a primary arbiter of one’s inherent and societal value, and key to the door of the modern economy. As Illich put it, “The distinctions between morality, legality, and personal worth are blurred and eventually eliminated. Each transgression is made to be felt as a multiple offense.”

As growing numbers of “students” and “teachers” are minted in this ecosystem of authority, knowledge itself becomes institutionalized and confused with increasingly gated “expertise.”

Institutionalization feeds on its own failure. As this process makes schooling prerequisite to social access, it also transforms schooling into the monomaniacal target of reform. Well-meaning reformers dive in to “solve” educational gatekeeping, not by questioning educational gatekeeping or encouraging alternatives, but by attempting to shove more individuals through the gate. Simply infeasible levels of equality of “schooling” (not learning) are demanded for larger and larger numbers of people throughout the globe.

As institutional schooling metastasizes, it drives down quality (and equality) and exacerbates gatekeeping far faster than it improves relevant “learning.” Simultaneously, it absorbs a larger and larger share of society’s resources. It comes to strangle and replace — to radically monopolize — all other forms of learning. Along the way, this educational behemoth shapes cultures and economies in its image, replacing the custom, communal solutions which flourished with massive, restrictive, uniform and grossly unequal and nonfunctional bureaucracies.

In a way, these monopolistic institutions were simply one species of “tool” which Illich argued had become socially pathological. Unlike more “convivial” tools, which can be individually or democratically controlled and which augment our abilities and creative drives, some tools — which Illich referred to as “manipulative” — are fundamentally controlled and controlling. These manipulative tools redirect human energies toward metastasizing “radical monopolies” which shape human freedom and behavior in ways ill-suited to happiness and autonomy.

Manipulative tools typically involve central control, are fundamentally unequal in results and access, and generate dependency. For Illich, the superhighway system of the United States was one such “tool.” It resulted from political pressures and gave new powers to a prioritized set of rich individuals and corporations with cars and trucks. At the same time, it created “traffic” and commuting, trapping growing amounts of time in transport and forcibly slicing up human societies.

Convivial tools, by comparison, involve democratic or equal access and expand individual agency. Illich provides the mail system as a core example. Available to all at an accessible and nearly flat rate, and using a clear and open protocol, the mail system is relatively unbent to the purposes of any single group. It empowers those who opt into it — without forcing upon those around them a new structure of interaction.

With this as background, we can turn to the modern monetary system.

We tend not to think of this, but modern governments have a radical monopoly on money, which itself is a tool at the center of all modern societies. Just like the schooling monopoly, the monetary monopoly shapes our society in profound and foundational ways. As with schooling standing in for learning, we’ve come to think that “fiat currencies,” like the U.S. dollar, are money — confusing the institution with the concept.

The monopoly on money is radical, in the Illichian sense, in that it monopolizes practically the whole space of economic value transactions. Alternative media of exchange are strongly discouraged by legal tender laws and taxing policy. This monopoly on value transactions is also, almost unavoidably, a monopoly on money generation, and this paired monopoly sits at the base of our economy and shapes society in manifold ways.

Because monetary systems undergird economies, and the U.S. dollar’s money monopoly is fundamental to the globe’s monetary system, the dollar money monopoly is almost maximally radical. It sits at the near-literal root of our economic and social structure and has systematic effects across the globe.

As a consequence of its fundamental position, features of the dollar have extraordinary global impact. Most notably, the U.S. dollar is a rapidly and arbitrarily inflating currency — in terms of “monetary inflation,” the simple expansion of the money supply. This has confusing but powerful effects.

When more monetary units are added into an economy, the real-world wealth in the economy is essentially unaffected. Each monetary unit of measure for that value, however, decreases in worth relative to this static economic wealth.

Monetary inflation would, therefore, naturally lead to “price inflation,” or the increase in the prices of market goods — relative to what would happen absent the inflation in the monetary supply and other dynamic factors. If, for example, the number of circulated dollars in a closed and static economy were suddenly to double, the value of each dollar in terms of market goods would cut in half. To put it obversely, each good now costs twice as many dollars. It does so simply because the same real-world total wealth — the same quantity of goods and services in “the market” — is now divided between twice as many fractional representations of that wealth.

In 2020 alone, the M1 money supply, the most narrow measure of dollars in circulation, increased by more than four times!


This gives us some sense of the “monetary inflation” component of this system, but in reality, each entity in this complex equation involving monetary and price inflation is unknown and essentially unknowable. The complete supply of money-like instruments is a complex summation of physical and digital dollars, eurodollars, precious metals, stocks and assets, treasuries and many other financial instruments. Above all this sits a vast mountain of leveraged credit in great and unknown excess to the first-layer financial instruments upon which it is based.

These base monies themselves come into circulation through a complex variety of explicit and implicit schemes. Furthermore, the relationship between monetary and price inflation is effectively impossible to measure, because price inflation is the sum of that unknown monetary inflation (relative to the unknowable mountain of both money and credit) and the incalculable deflationary effect of technological growth.

Price inflation itself is only estimated through proxy. Bureaucrats track the “consumer price index,” or CPI, the averaged changing prices of an arbitrary basket of goods in an arbitrary set of markets, subjected to arbitrary “hedonic adjustments” to attempt to compare apples to apples across time. The validity of this fundamentally arbitrary bureaucratic measure is further brought into question by a century of pressure from adjacent governmental institutions. Those whose livelihoods depend on these institutions — which in turn depend on continued income streams — very much value the ability to “print” new money, as do the politicians who use money printing to more easily fund the pork-barrel legislation for which they are lobbied. This ability to print in turn depends on citizens’ systematic underestimation of monetary inflation’s deleterious effects. The CPI, a malleable metric only loosely determined by reality, is a tool for the extension of political control.

The oversimplification, then, is directionally correct: When the dollars in circulation increase, that has the corollary effect of increasing the cost — in dollars — of goods and assets. This thereby decreases the value, in goods and assets, of each dollar.

Given the rate of governmental and credit-based money “printing,” which vastly exceeds the rate of taxation, monetary inflation acts as an invisible tax of a scale far greater than all visible taxes. This tax is not only invisible but also highly regressive. Those who hold more of their wealth in dollars — primarily, the poor — lose, and those who hold more assets — mostly the rich — win. The inherent effect of monetary inflation, then, is “redistribution” from the have-nots to the already-haves.

The regressive nature of this invisible tax is even more pointed, in that, as with illicit counterfeiting, new money does not enter the economy in all places at once. Rather, to oversimplify again, it enters the economy through the hands of bankers and bureaucrats in what is referred to as the Cantillon effect. When the Federal Reserve “prints” money to buy newly minted U.S. treasuries (or the government mints a “wacky” trillion-dollar coin to avoid “financial Armageddon”), that money is spent in government appropriations or dolled out to back-stop (and unavoidably generate moral hazard for) bank speculators.

All of this, through the magic trick of engineered monetary inflation, comes at the cost of “the little guy.”

Given his concerns with excess consumerism, Illich might have decried yet another effect of this radical monopoly on money: An inflationary monetary system drives consumerism. This is because it devalues money in the future, which encourages spending over saving.

Recall, if you can, the days of $1 coffees and consider whether it would have been wise to hold onto that dollar for a coffee today.

This is not an accident, but in fact an explicit goal of Keynesian monetary theory, which aims to achieve “economic growth” through consumption. You may recall the post-9/11 exhortations to restart the economy through spending, but the chief driver of this consumerism is not political exhortations but subtle incentives.

The goal is increased growth through increased spending; the mechanism is increased spending through a money that devalues in your pocket. To Keynes, saving was hoarding, which “depresses the business of preparing to-day’s dinner without stimulating the business of making ready for some future act of consumption” and which should consequently be discouraged. Whatever the merits of this goal, this explicit choice to incentivize spending shapes human decisions in subtle but radical ways. It produces, insidiously, a culture which is relatively short-term oriented by design and whose citizens can only avoid this short-termism by seeking assets which don’t devalue — for example, gambling on the stock market.

Conceived as a tool, then, fiat money “manipulates” its holders to consume more than they otherwise would. “Otherwise” here refers to a clear alternative: Using the sorts of moneys toward which people have oriented across history. People have consistently revealed their preference for monetary instruments that hold their value over time. This is clearly why much of the world settled on gold and, in earlier communities throughout the world, unique, costly and scarce resources such as wampum or rai stones. Like most “manipulative tools,” fiat money has repeatedly been foisted upon people against their will.

The pervasive and insidious effects of this radical monopoly are hard to believe. Fish to fish: This is the water we live in, and it is hard to see. But the invisible effects of the money monopoly seem just as destructive — I would argue more so — than many of the radical monopolies which Illich criticized.

You might find this all somewhat excessive or unbelievable. If so, I introduce a brief quotation to add some intellectual heft — from Keynes himself — to my assertions:

“Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security but [also] at confidence in the equity of the existing distribution of wealth.

“Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers,’ who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.

“Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

As Keynes’ analysis suggests, the levers of this inflationary system are far from democratic reach. Even were we to “diagnose” this problem, the Federal Reserve is antidemocratic by design. Despite vehement objection to bailouts and money printing, the Fed continues unabated. Across administrations, the printer “brrrrs.”

The institution of fiat money and its failures as a tool seem forced into our hands and beyond the reach of political change. Illich, who frequently (and somewhat cryptically) referred to “participatory democracy” as a more ideal means of governing our institutions and choosing our shared tools, would likely not have appreciated this structure.

Given this background, we can compare Bitcoin to the modern monetary system from an Illichian perspective.

Bitcoin is a “decentralized” cryptocurrency. That decentralization, and its import, are often poorly understood. Bitcoin is decentralized in the sense that its core protocol was designed such that no single party can control its programmatic issuance or usage. Instead, Bitcoin is

  • a narrow rule set, codified in a protocol,
  • a network of nodes (individual computers) which speak that protocol, and
  • a unit of value (lowercase “bitcoin”) that transfers along that network, using that protocol.

The value of each bitcoin sent is communally determined, and the rules within the protocol are set and maintained not by any small group or individual, but by a complex game-theoretic interplay between various types of nodes on the network, all of which are incentivized to support the network’s health and the coin’s value.

There is no Bitcoin™ Incorporated. Decentralization here is tightly coupled with accessibility, flexibility and fairness: This is not a highway system, built to the specifications of individual lobbying industries, but rather an open system, controlled by those involved in it and operating as an unobtrusive alternative. Unlike our fiat monetary system, usage is not legally obligated or pressured but is fundamentally and exclusively opt-in.

With this understanding of decentralization, we might compare Bitcoin to mail, Illich’s prime example of conviviality. Bitcoin is an open network, with an extremely low barrier to entry. Unbanked individuals in impoverished countries can find their only banking services in this network and can onboard by selling anything of value for any “satoshis” sold in exchange. A slow internet connection and a simple phone app are all one needs to start transacting peer to peer with anyone in the world. The Bitcoin Lightning Network — a “Layer 2” network “on top” of Bitcoin which expands its functional reach — then allows any individual to transact instantaneously and for essentially zero fee.

This functionality is transparent and non-discriminating, because it is based on open, un-gated networks with no knowledge of or interest in who you are. Although the cost of sending bitcoin is per transaction, not per monetary size (meaning a billion dollar and five dollar “on chain” transaction cost the same), Lightning provides small-scale transactions for essentially zero fee.

Moreover, Bitcoin’s rule set and evolution are governed by a process of “participatory democracy” among stakeholders in the network, protocol and monetary unit. Changes to the protocol are furiously debated among owners of the coin, operators of network nodes and “miners” who validate the transaction history, and they must achieve extremely high levels of adoption to be implemented — 90% for the most recent protocol upgrade. This is a form of democracy whose varied participants each have “skin in the game” — investment in the network’s health and value — and which is fundamentally resistant to centralization. The network is designed to handle dissidence by ejecting nodes that fail to follow the protocol, meaning that the highly democratic rule set applies equally to all.

Bitcoin is an Illichian convivial tool in another manner: Since the protocol is transparent and open source, any technical individual can build upon it for their own creative use. Within a short time, anyone can learn to create their own “wallet.” With minimal investment, any individual or community can set up their own node — or use someone else’s. Unlike Visa or Mastercard, this open protocol allows for a flowering of novel and custom tools to interact with it, many of them “free and open-source software” supported by the community. Self-sufficiency is central to the global community’s ethos.

The customized applications for El Salvadoran Lightning wallets illustrate Bitcoin’s tremendous capacity for empowerment. As El Salvador has adopted bitcoin as a form of legal tender parallel to the dollar, the government has published its own wallet software. But El Salvadorans are free to adopt any other software they want, and the protocol allows them to send funds to or from the government wallet using any other piece of Lightning software, including some they might build. A team in El Zonte, El Salvador (aka “Bitcoin Beach”), has spent months living with the community and understanding their specific constraints and needs to build out wallet software that conforms to them. This software is community-specific but uses the global Bitcoin and Lightning networks to provide instant final settlement and interoperability with the rest of the world. Concretely, Bitcoin has drastically reduced the cost and difficulty of remittances for El Salvadorans and is moving to sharply reduce the friction of sale in local marketplaces in those countries.

From this perspective, Bitcoin seems like an ideal Illichian tool. It is a significantly more democratic system of money, more in line with the characteristics of money toward which people have gravitated throughout history. It removes the manipulative drive of fiat currencies toward consumerism, is far more open to individual access and creative usage, is exclusively opt-in, is far less coercible, and reduces the concentration of power unavoidably downstream from the ability to generate money from thin air.

The Bitcoin-powered overthrow of this monetary monopoly would also threaten monopolies downstream from it. Many of the “radical monopolies” Illich criticized are supported by unrestricted bureaucratic funding. The U.S. Department of Education, for example, with its annual budget north of $60 billion, is impossible to imagine in the same shape absent the huge quantities of money generated via magic trick and funneled into our federal bureaucracies. (It was founded eight years after Nixon removed the U.S. from the gold standard in 1971.) The U.S. government supports literal trillions worth in non-expungeable student loans (largely for upper-middle-class students). Absent massive direct and indirect funding of these departments and industries, they might shrink to more manageable, or even salutary, size.

This is because federal expenditures like these are not simply large but inflated — far in excess of what our taxes alone would fund. They represent a further leap of funding above and beyond that reached through our nominally republican (lowercase R) processes. And they are the result of the degradation of that process into one where the heavily lobbied individuals of the legislative state debate multi-thousand-page bills nobody has read, while executive bureaucrats govern massive departments well beyond public oversight. Both spew out bottomless streams of money to growing hoards of rent seekers.

Much of this money streams out globally, through U.S. funding of the World Bank or International Monetary Fund. Both institutions, and many others, are essentially nongovernmental arms of the Fed, whose pipes in the money pool pump money to bureaucrats, bankers and politicians abroad. Through the leash of free money, these institutions exert control.

This radical monopoly, in other words, is an engine for both money and power inequality, as well as the expansion of “industrial institutions” and ways of thinking, both in the U.S. and abroad. It is a tool for forcing the preferences and goals of bureaucrats and a money-associated oligarchy over all other people throughout the world. Often, these bureaucratic goals are in support of radical institutional monopolies. By shrinking their funding, Bitcoin looks to similarly reduce their reach to what could be supported by explicit taxation.

Looking at not just the present but future alternatives, “fiat” money looks to become an even more manipulative tool. China has begun rolling out its own “central bank digital currency” (CBDC). Embedded within a social tracking system explicitly designed to grade individual behavior, China’s digital yuan grants the government capacity to dial up or down the half life (or simple quantity) of money in your individual account or to curtail your ability to purchase chosen goods based on your position vis-a-vis the centralized arbiters of social fitness. This massive, Orwellian system of centralized control would radically transform Chinese society into a seamless and practically inescapable authoritarian state.

China’s example is particularly frightening but is unlikely to remain unique for long. Other countries and global institutions look to jump on this CBDC train and have made this desire explicit. This sits uneasily with the authoritarian overreach of recent history. This past year, we’ve seen increasingly authoritarian governmental measures globally, including the tracking of quasi-mandated health interventions used as gating factors for societal access. These have been accompanied, within the U.S. and elsewhere, by anti-“terrorism” measures (including against parents advocating for curricular change) that hearken quite eerily back to the post-9/11 attack on individual freedoms which we will never regain. Color me conspiratorial, but the global trend seems toward an even more coercive and radical monopoly on the way we communicate value with one another.

Although frequently lumped in with Bitcoin as “cryptocurrencies,” these technologies are, in ethos and practice (and technology), inherently opposed. Centralized in every way, they represent, instead, the most recent and worrisome update of the institution and tool of “fiat money,” and Bitcoin seems to be their only feasible alternative.

From another perspective, however, Bitcoin seems very much like something Illich might object to. Illich was highly concerned about “industrial society,” and, in his book “Energy and Equity,” he argued that energy usage above certain per capita “quanta,” engendered alienation and cultural destruction.

Bitcoin mining uses energy, and there seems to be little doubt that were the world to “hyperbitcoinize” and bitcoin to become its dominant reserve currency, mining would be an energy-intensive technology.

There are powerful arguments against this as a core concern, however. Most notably, Bitcoin looks to replace currencies which are as high or higher in environmental cost, but whose energy (and social) costs are not nearly so “transparent.” Modeled explicitly on gold, Bitcoin comes into the world through a process of “mining” that transparently requires work — in this case computational work — as part of its globally accessible process of validation and distribution. This energy use is explicit and quantifiable. And it varies according to the value of bitcoin, such that a more highly valued bitcoin would involve more energy use to secure and mint it, although precisely how much more isn’t calculable with great precision.

This energetic cost must be considered in contrast with the more hidden energetic costs of our current “fiat” monetary system, however. Tightly pegged to the valuation of oil since the OPEC crisis, the U.S. dollar depends on oil’s market value and the United States’ control over it. This “petrodollar” system, in which oil is almost exclusively sold for dollars, necessitates a massive army to protect and control the regions of the world where oil is richest. It is a hidden driver of unmeasurable scale behind American intervention in the Middle East. Since bitcoin aims to replace or significantly supplant these other currencies, its energy usage is best considered to be largely alternative, rather than additive, to currencies with more externalized energy and social costs.

Bitcoin’s energy usage is also unique in terms of its energy mix. Bitcoin miners are incentivized to search out the cheapest energy. This generally drives them toward excess or waste energy: methane that would otherwise be “flared”; hydroelectric or geothermal (volcanic!) energy “stranded” too far from a consumption point to meaningfully monetize; wind during an unusually windy day. Of course, Bitcoin will continue to also use new energy, but a large percentage of its “mix” is, through natural incentives, driven toward the more efficient usage of preexisting energy supplies.

More fundamentally, a significantly less inflationary money supply would decrease rates of consumption. This, in turn, would be expected to have a downward pressure on energy usage, by reducing the number of energetically costly items individuals are driven to buy. Those who believe that a “sustainable” future is only achievable by drawdowns on rates of human consumption should find this effect encouraging.

I can think of a final, more esoteric and economical response to critiques of Bitcoin’s energy use, although Illich may have found it less compelling: A predictable currency allows our markets to more efficiently meet the same communal desires. As a currency with predictable issuance and limited supply, bitcoin, if widely adopted, should be expected to drive toward a maximally predictable market value. This stable value will make it a more even ruler for economic measurement. Given just how unassessable and unpredictable our fiat currencies are, moving to Bitcoin could have powerful implications for economic (and energy) efficiency.

Currencies convey price signals in a market economy. These price signals are the information which the market — in effect, an emergent neural network — needs to best allocate scarce resources with alternative uses. If the currency fluctuated randomly from day to day, the ability of market agents to make informed decisions would plummet. Conversely, if the predictability of the price signal approached its theoretical maximum, so would the efficiency of our markets. That efficiency can be measured in terms of human desires met per resources invested. As it goes up, fewer resources are needed to meet the same human desires.

Given these arguments, the Illichian take on Bitcoin’s energy usage is unclear. It is clearly, at first blush, an energy-intensive industry. But its long-term energetic effects appear likely to drive less and more efficient energy use than our “fiat” status quo.

Finally, Illich may have criticized Bitcoin for its pure globalizing and market-driving effects. Illich was a nuanced and unique thinker, and he eschewed categorization as Marxist, anti-capitalist or any other pat label. But he clearly felt that the forces of global “industrial” capitalism were pathological in many ways. He argued that the West had globally exported a once-particular world view. This view ordered society around the efficient allocation of goods (including “human resources”) for consumption, and this view was increasingly replacing more local, cultural, communal, self-sufficient ways of living. In so doing, it was attacking our self-sufficiency, our ability to learn, be healthy, and interrelate, our traditions and customs, and our most fit and human ways of being.

Bitcoin is a fundamentally boundary-free technology. It is digitally native and creates a global digital marketplace. This seamless global interconnection, on its own, risks a further erosion of the particular cultures and traditions, and the human agency and independence associated with them, which Illich cherished.

But our world is already, for better or worse (in many ways, I think, both), an interconnected industrial marketplace. This ship — both good and bad — has already sailed. And while Bitcoin risks perhaps furthering the reaches of that industrial marketplace, it seems clear to me that that trend is inherent and unavoidable — and so should be shaped rather than combatted.

All in all, then, the place of Bitcoin within the framework of Illich’s thinking is complex and unclear. I, for one, believe it paves the way toward a brighter future in a way he would be likely to agree with. It nudges our future global economy toward openness, accessibility, fairness, creativity and security. It pushes forcefully against the churning drive toward ever-more unnecessary — and fundamentally unwanted — consumption and wrenches back control over our primary means of economic value transaction. It also fights against what I see, and believe Illich would see, as an otherwise dark economic and political future: A global digital panopticon, in which central powers track and control our every move, and the very means with which we communicate value becomes a monopolistic tool for manipulation.

This is a guest post by Sasha Klein. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.


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Proshares’ Bitcoin ETF sees $1B in first day volume, BTC price hits new high, and Coinbase partners with NBA and WNBA: Hodler’s Digest, Oct. 17-23

Coming every Saturday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.

Top Stories This Week

Bitcoin officially hits new all-time high above $65K

Bitcoin (BTC) surged to new all-time highs this week, breaking the former ceiling of $64,900 from April as the asset went into price discovery mode before topping out around $67,000.

The bullish momentum coincided with the successful launch of ProShares’ Bitcoin futures-based exchange-traded fund (ETF). Many onlookers are expecting the price to increase in the coming weeks and months, with the more optimistically inclined even suggesting that up to $300,000 is possible in the near future. 

With Bitcoin’s market capitalization dominance at its highest since mid-May, many popular traders have stressed that now is the time to put a focus on digital gold and put the altcoin market on the back burner for the moment.

ProShares Bitcoin-linked ETF launches on NYSE

ProShares achieved a major milestone for the crypto sector this week after the firm debuted its Bitcoin futures-based ETF (BITO) on the New York Stock Exchange (NYSE) on Tuesday. 

ProShares’ Bitcoin Strategy ETF saw around $1 billion in volume on its opening day, with Bloomberg analysts stating that it was arguably the largest first-day volume for an ETF in terms of “natural” or “grassroots interest.” 

After two days on the NYSE, Proshares’ ETF became the fastest fund ever to reach $1 billion in assets under management. Following Proshares’ ETF, many onlookers are waiting to see how the next in line performs. At the time of writing on Friday, Valkyrie just launched its Bitcoin futures ETF on the NYSE.

Coinbase announces multiyear partnership with NBA and WNBA

Top crypto exchange Coinbase has penned a deal with the NBA, WNBA, NBA G League, NBA 2K League and USA Basketball as part of a multiyear sponsorship deal. As part of the deal, Coinbase will work to educate basketball fans on crypto.

According to the NBA, Coinbase will create “unique content, innovations, activations and experiences” to help basketball fans to learn about the crypto space. The firm’s branding will also appear during the televised games.

The move could be a real “slam dunk” for the industry in terms of mainstream adoption, with data from Statista showing that an average of 1.6 million people watched NBA regular-season games across major networks during the 2019–2020 season.

Mariah Carey buys Bitcoin, hopes to empower fans through education

Mariah Carey, the pop icon behind the divisive Christmas song “All I Want For Christmas Is You,” has partnered with the Winklevoss twins’ crypto exchange Gemini to promote Bitcoin adoption and support girls of color in their pursuit of STEM degrees — a broad education category that refers to science, technology, engineering and mathematics. 

In a video to her 10.2 million Instagram followers, Carey said she’s a Bitcoin investor and offered her fans a referral code to redeem a whopping $20 in free BTC. 

Her promo deal is linked to charitable causes, as users who sign up through the referral link and trade digital assets on Gemini will be contributing directly to Black Girls Code, a nonprofit organization that provides technology education for African-American girls.

Brazilian toddler makes over 6,500% profit on her first Bitcoin holding

A four-year-old hodler from Brazil has earned more than 6,500% in profit on her first Bitcoin. The girl’s father, João Canhada, gifted 1 BTC to his newborn in 2017 when the asset was priced at around $915. 

Canhada is the founder of Brazilian crypto exchange Foxbit, and stated that he bought his daughter Bitcoin not just as a gift, but as a “way of investing” in the emerging crypto sector. It appears that he was at the right place at the right time, as the price of Bitcoin went on to surge to $20,000 at the tail end of 2017.

While there have been many bumps along the road, Bitcoin was worth around $61,000 at the end of the week, suggesting her profit now sits at roughly 6,560%.

Winners and Losers

At the end of the week, Bitcoin (BTC) is at $60,658, Ether (ETH) at $3,963 and XRP at $1.09. The total market cap is at $2.51 trillion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are OKB at 71.25%, Nexo (NEXO) at 33.80% and Huobi Token (HT) at 33.70%.

The top three altcoin losers of the week are Flow (FLOW) AT -21.20%, Celsius (CEL) at 14.00% and Perpetual Protocol (PERP) at -13.14%.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

Most Memorable Quotations

“If left unchecked, these digital assets and payments systems could harm the efficacy of our sanctions.”

U.S. Department of the Treasury

“We’ve got a lot of smart guys working at Icahn & Company, and we just don’t understand Bitcoin. I’m not saying it’s bad or good, I’m just saying we don’t understand it. We’re not going to invest in something we don’t get. […] The jury is really out on whether Bitcoin has intrinsic value or acts as a store of value. If inflation gets rampant, I guess it does have value. There are so many variables, it is a very difficult thing to invest in.”

Carl Icahn, founder of Icahn Enterprises 

“There’s a lot of history here. We think it’ll track quite well and, most importantly, we think that a combination of a regulated futures market and a 40-act ETF will really open up the opportunity to conveniently get Bitcoin exposure to a lot of folks who may have been waiting on the sidelines.”

Simeon Hyman, head of investment strategy at ProShares

“To protect consumers and reduce costs, we encourage the streamlining of state-level regulatory frameworks for stablecoins and the issuance of special-purpose charters by federal banking regulators for stablecoin companies seeking to operate nationally.”

The Chamber of Digital Commerce

“DAOs do not clearly fall within any of Australia’s existing company structures. […] This regulatory uncertainty is preventing the establishment of projects of significant scale in Australia.”

The Senate Committee on Australia as a Technology and Financial Center (ATFC)

“Diem is not Facebook. We are an independent organization, and Facebook’s Novi is just one of more than two dozen members of the Diem Association. Novi’s pilot with Paxos is unrelated to Diem.”


“We’ve made a lot of noise in the last few months about getting hyperactive in cryptocurrency.”

Adam Aron, CEO of AMC

“AI, especially the sort of low-tech, surveillance form, is essentially communist.”

Peter Thiel, co-founder of PayPal

Prediction of the Week 

Traders brace for a drop to $58K if Bitcoin price loses the $62K support

Bitcoin’s price favored north this week. According to Cointelegraph’s BTC price index, the asset broke its previous all-time high just shy of $65,000, going on to reach $67,000 amid a week filled with Bitcoin ETF headlines. Bitcoin cooled off following its surge, however, dropping back down to the low $60,000s. 

Several people weighed in on potential upcoming price action for Bitcoin. The Twitter account for E-Club Trading, an investment analysis organization, mentioned a level around $58,000 as one potential landing zone if Bitcoin loses the $62,000 level. 

BTC could also possibly ride right up to $80,000, or it could visit $58,000 or $53,000 first prior to pushing for $80,000, ExoAlpha chief investment officer David Lifchitz noted.

FUD of the Week 

New York businesses ask governor to deny permits for crypto mining

New York Governor Kathy Hochul received a letter this week urging her to deny permits enabling the conversion of the city’s old fossil-fuel power plants into crypto mining centers. The power plants in question are the Greenidge Generating Station and Fortistar North Tonawanda Facility, which now are the target of ambitions to mine and hodl at full throttle.   

The letter was co-signed by a long list of local organizations, businesses and labor groups, who banded together to voice their concerns over the energy-intensive poof-of-work crypto mining model. 

“Proof-of-Work cryptocurrency mining use enormous amounts of energy to power the computers needed to conduct business — should this activity expand in New York, it could drastically undermine New York’s climate goals established under the Climate Leadership and Community Protection Act,” the letter read.

NYAG directs 2 crypto firms to shut down, investigates 3 others

Speaking of New York, the state’s attorney general’s office went after five local crypto firms on Monday, ordering two unnamed companies to shut down operations, while launching investigations into the other three. 

The attorney general’s office alleged that the two firms engaged in unlawful activities, and requested details on the other firm’s lending products, policies, procedures, clients in the state and other relevant information.

One of the three crypto lending firms under investigation is Celsius Network, with the firm confirming the news in a blog post on Tuesday. Celsius said it is “working on providing regulators in New York” with info regarding its business.

Senators pressure Facebook to ‘immediately discontinue’ Novi wallet pilot

In what may or may not be FUD depending on one’s views towards Facebook, the social media giant was urged by five U.S. senators to halt its crypto wallet just hours after its pilot program went live this week. 

Facebook’s Novi wallet launched a pilot in the United States and Guatemala on Tuesday in partnership with Coinbase, but the group of senators, which included crypto skeptic Elizabeth Warren, weren’t having it. In a letter sent to Facebook CEO and meat-smoking enthusiast Mark Zuckerberg, the senators voiced their “strongest opposition to Facebook’s revived effort to launch a cryptocurrency and digital wallet.”

“Facebook cannot be trusted to manage a payment system or digital currency when its existing ability to manage risks and keep consumers safe has proven wholly insufficient,” the letter read.

Best Cointelegraph Features

The crypto industry royally screwed up privacy

Sadly, there are several reasons why the blockchain community has fallen short in making privacy a tier-one priority, and that must be changed.

Lushsux: A decade of ass-whoopin’ and skullduggery in a single NFT

“Generally, when I’ve got things successful, it’s just through a bit of skullduggery.”

Bitcoin futures ETFs: Good, but not quite there

With a Bitcoin futures exchange-traded fund, getting exposure to the world’s largest cryptocurrency will be easier than ever.


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Fear of the unknown: A tale of the SEC’s crusade against synthetics

On the opening day of Messari Mainnet 2021, New York City’s long-awaited first crypto conference since the start of COVID-19, reports came blazing in via a viral tweet that the United States Securities and Exchange Commission had served a subpoena to an event panelist at the top of an escalator in broad daylight. While it’s still not entirely clear who was served (or why), this isn’t the first time the SEC has encroached upon the crypto industry in full view of the public. Let’s go back a mere two months.

On July 20, 2021, SEC Chair Gary Gensler issued his remarks outlining the SEC’s scope of authority on cryptocurrency:

“It doesn’t matter whether it’s a stock token, a stable value token backed by securities, or any other virtual product that provides synthetic exposure to underlying securities. These platforms — whether in the decentralized or centralized finance space — are implicated by the securities laws and must work within our securities regime.”

Just like the SEC’s bold arrival at Mainnet, Gensler’s remarks definitely did not arise out of the blue. They arose because Gensler — along with his regulatory entourage — finally arrived at the terrifying realization that cryptocurrency’s tokenized, synthetic stocks are just like stocks, but better.

Related: Powers On… Don’t worry, Bitcoin’s adoption will not be stopped

So, what are synthetics?

Synthetic assets are artificial renditions of existing assets whose prices are pegged to the value of the assets they represent in real-time. For instance, a synthetic share of renewable energy giant Tesla can be purchased and sold at exactly the same price as a real share of Tesla at any given moment.

Consider average stock traders for whom profit margins, accessibility and personal privacy take precedence. To them, the apparent “realness” of TSLA acquired from a broker-dealer will not hold water next to the cryptoverse’s many synthetic renditions, which can be acquired at a fraction of the cost at 8:00 pm on a Sunday evening. What’s more, it’s only a matter of time before traders will be able to stake synthetic TSLA in a decentralized finance protocol to earn interest or take out a collateralized loan.

Related: Crypto synthetic assets, explained

The role of synthetics

Decentralized platforms built on blockchain and legacy financial systems are on the verge of clashing in one of the most tumultuous battles in economic history, and Gensler’s remarks merely constitute a shot across the bow. Make no mistake: decentralized finance (DeFi) and traditional finance (TradFi) have already drawn their battle lines. They will remind powerful incumbents and new entrants alike that, contrary to what contemporary wisdom may suggest, systems of exchange imbue assets with value — not the converse. The ramifications cannot be understated: Synthetic assets establish a level playing field where centralized and decentralized systems can compete for users and capital — a free market for markets.

Typically, digital marketplaces support an assortment of assets that compete by being exchanged against one another. But when the asset side is fixed — that is, when identical assets exist across multiple platforms — it is the marketplaces that compete for the largest share of each asset’s daily trading volume. Ultimately, traders settle the score, determining where assets should live and which systems should die.

On that accord, while Bitcoin (BTC) competes indirectly with fiat currencies as a unique form of money transacted over a decentralized network, it is the array of emergent fiat currency-pegged stablecoins that pose the most pernicious and immediate threat to national governments and their directors in central banking. Unlike Bitcoin, which often proves too volatile and exotic for outsiders, fiat-backed stablecoins cut down the complicated tradeoffs and keep the simple stuff: Around-the-clock access, low-cost international transfers, kick-ass interest rates and 1:1 redemption into fiat.

Related: Stablecoins present new dilemmas for regulators as mass adoption looms

Even to skeptics, stablecoins drive a strong bargain, and the U.S. Congress put forth its own token of acknowledgment with its December 2020 legislative proposal of the STABLE Act, which would require stablecoin issuers to acquire the same bank charters as their centralized counterparts at Chase, Wells Fargo and so on.

Incumbent institutions have a long history of seeking out, acquiring and, at times, even sabotaging their competition. It’s not difficult to see where legacy banking’s aversion to synthetics comes from. As decentralized platforms become more user-friendly and tread further into the mainstream, significant buy-side demand will migrate from legacy platforms and their formerly exclusive assets into digitally native synthetics.

Robinhood saga: The remix

Imagine what might have transpired if Robinhood users had access to synthetic shares of GME and AMC on Jan. 28, 2021.

If even a small minority of the buy-side demand for those stocks — say 10% — migrated from Robinhood to Mirror Protocol’s synthetic stocks, it would have effectively inflated the supply of shares outstanding and consequently suppressed the share price. In turn, GameStop’s C-level executives would have been in for a real tough board call.

Related: GameStop inadvertently paves the way for decentralized finance

And then, consider also the implications of investors staking their synthetic GME and AMC in DeFi protocols to receive mortgage and small business loans at drastically reduced interest rates, definitively cutting banks and other incumbents out of the equation.

Such a scenario would behoove GameStop and AMC to migrate a fraction of their shares to blockchain-based platforms in order to restore robust pricing mechanisms. Meanwhile, investors on the retail side, who only seek a superior user experience and the benefits of interoperability with DeFi protocols, would ultimately win — something you don’t hear too often in modern financial markets.

From stocks to commodities, real estate instruments, bonds, and beyond, the emergence of synthetic assets will disrupt pricing mechanisms, catalyze unprecedented turbulence in financial markets and produce unforetold arbitrage opportunities, unlike anything the world has ever seen. Although the consequences of such a dramatic shift are beyond prediction, centralized incumbents will not voluntarily cannibalize their business models — free markets must be entrusted to select winners.

The future of synthetics

As demand for synthetic assets reaches and exceeds that of their purportedly regulated TradFi counterparts, the capitalists and investors of the world will be forced to contemplate what in fact makes an asset “real” in the first place, and will ultimately determine not only the direction of free markets but their very constitution.

In the heat of an existential crisis, financial institutions and governments will undoubtedly get all hands on deck: The SEC will battle to eradicate synthetic stocks, Congress will commit to subduing stablecoin issuers from challenging the international banking elite, the Commodity Futures Trading Commission (CFTC) will step in to tame platforms dealing in derivatives and Financial Crimes Enforcement Network (FinCEN) will continue to target those aiming to protect user privacy.

Related: The new episode of crypto regulation: The Empire Strikes Back

Rough days lie ahead — and it is already too late to turn back the hands of innovation. Compound’s cTokens, Synthetix’s Synths and Mirror Protocol’s mAssets have already opened Pandora’s box, while Offshift’s fully private zk-Assets are slated to launch in January 2022. Whatever unfolds, the rigid barrier separating the realm of traditional finance from that of emergent decentralized platforms will be permanently dismantled, and a new age of financial freedom will spring forth.

May the best systems win.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Alex Shipp is a professional writer and strategist in the digital asset space with a background in traditional finance and economics, as well as the emerging fields of decentralized system architecture, tokenomics, blockchain and digital assets. Alex has been professionally involved in the digital asset space since 2017 and currently serves as a strategist at Offshift, a writer, editor and strategist for the Elastos Foundation, and is an ecosystem representative at DAO Cyber Republic.