well Federal Reserve Chair Jerome Powell giving his
long awaited speech today cautioning the U.
S. Economy
will need tight monetary policy quote for some
time and quote before inflation is under control.
He indicated that he's open to another three quarters of a
percentage point rate increase when the Fed meets in september with Bitcoin
and other cryptocurrencies drifting lower on the news.
So joining me now is kurt walker
Jr chief Bitcoin historian at coin geeky crypto news website.
Thanks for coming on the show.
Certainly we've seen a lot of volatility in the overall market this year.
The crypto market as well. Bitcoin below that $21,000 mark as we speak.
Did you expect that the crypto market would react this way to to Powell's comments.
Absolutely.
We've only seen Bitcoin performing in a QE environment since 2009 frankly and
really we saw this right when the talk even of of of Q.
T. Came up. Well that that was the top of the market.
We've seen it underperform all kinds of things ever since.
And that is of course across a a wider bear market
in equities commodities and a whole bunch of other things.
What should investors traders know people
are generally interested in the crypto space
right now kurt as we do have a Fed
that is still tightening monetary policy raising rates,
putting downward pressure on risk assets like Bitcoin
as well as this so called merge the merge
if you will that is approaching for ethereum.
Yeah I think if people are gonna treat these things
as risk assets then they're gonna behave like it,
you know, that these things have other utility.
Bitcoin was, was an aggressive disruptive payments technology,
but it's been largely ignored for that.
People want to just treat it as a, as a portfolio asset, then,
you know, it's just going to play as a risk asset and that's pretty unfortunate.
Uh, and I think we're seeing similar things with ether as well, you know,
ether is allegedly supposed to solve some of these problems give extra utility,
but it's really,
really struggled and it's been really apparent the last two
years that fees are even higher than on Btc.
And so this merge is supposed to solve things,
but we haven't really seen any evidence?
Uh, at least I haven't seen any evidence that it will.
And, and so I think people are starting to look at this and say,
you know, maybe maybe it was a bad risk asset interesting.
Well,
is there any expectation we've covered for a long time now
chris here more than a year as it's been in the news
Ceo talked about it. Elon musk included last spring,
just in terms of the carbon footprint that mining transacting in Bitcoin
does offer this merge that is approaching for ethereum
and the crypto space as a whole. Does that make it any more carbon friendly?
You know, I think it's a really complicated issue.
I think,
proof of work really gets a bad rap
because people are looking at consumption without actually looking
at the possibility for creation and if we look at cost without looking at are y then,
well, it's easy to make anything look, you know, scary.
And so I think if you look at what proof of work is actually capable of and,
and things that could be created with the Bitcoin protocol,
you know, it suddenly starts to look like, hey,
maybe this is more efficient than things like google or amazon or some of these
other internet backbones as for the merge and moving to things like proof of stake,
um, you know, we,
we've yet to see these things perform proof of
stake assets claim to be more environmentally friendly,
but we don't see them scale.
And I think that's the first thing that needs to be solved is these things need
to be used in the real economy to generate excess benefit outside of just this,
you know, absorption of value.
Otherwise unfortunately the critics and people who say, hey,
maybe we're just wasting a lot of money,
maybe they're right.
How long does it take to measure something
like that kurt and really just decide whether
or not it is effective and doing something
that's improving versus hurting the overall climate.
You know, this is gonna sound a little pithy, but I think the answer is more,
more data is better data and you know, 13 years of data is,
is not really enough compared to what we've looked
at for the rest of the global economy.
There's not really a lot of people that do
the same thing with like the Internet backbone itself.
There are some, but but we look at that and say we need the Internet,
the Internet has spillover benefits right now.
We haven't really seen the spillover benefits of Blockchain assets nearly as much.
And so
it's really hard to make a very strong case that it's
worth the cost, essentially.
Alright Kurt Bulger, Jr, chief Bitcoin historian at coin geek
kurt, thanks so much for joining.