The Good, The Bad And The Ugly From 2022, Bitcoin’s Year Of The Bear
For Bitcoin, 2022 was a year of lessons, frustrations, vindications, progress and, in some cases, regress. What should we take with us for 2023?
This is an opinion editorial by Aleks Svetski, author of “The UnCommunist Manifesto,” founder of The Bitcoin Times and Host of the “Wake Up Podcast with Svetski.” It is part four of his “Remnant Series.”
What a year. Many of us said that it would only get stranger, but I’m not sure anyone was truly ready for what would transpire.
In this short article, I’m going to have a quick look at the good, the bad and the ugly of 2022, and I’ll talk a little about what decisions I’m making for 2023 onwards. I’ve been controversial at the best of times, to say the least, and perhaps unnecessarily toxic at the worst. I’ve decided that this needs to change because it’s neither healthy, nor useful. There are others who can hold that mantle. My focus herein shall be education. And more of it.
Anyway, let us get on with the review of the year of the bear.
This was a year of cleansing — a cold shower for the Bitcoin industry at large, which was caught up in the froth and hyperbole of the “crapto” industry.
Many of us came into 2022 expecting to see bitcoin rally back through all-time highs, through $100,000 and off to $250,000. It was almost a done deal. Major Bitcoin-focused social media accounts were adamant that, because bitcoin is now held on the balance sheets of large institutions and public companies, the days of “80% drawdowns are behind us.”
While we pointed out shitcoins, scams and the like, we were well and truly caught off guard with the level of fraud and shenanigans underlying much of the frothy price movement.
Let’s list them out:
First, we had the shitshow over at Luna with our friend Do Kwon, the stablecoin superman who thought he could do what no central bank in history has ever been able to do: maintain a peg.
He was positioned as a wonderboy of the financial world. Mike Novogratz even tattooed Luna on his shoulder in classic, frothy, peak-cycle fashion:
Of course, this stupidity blew up and took a bunch of idiots with it.
Next, we had Three Arrows Capital (3AC) and the “crapto hedge funds.” The managers of said fund disappeared, along with their clients’ money, only to reappear months later to post inspirational tweets. Seriously.
The “no pants when the tide goes back” out continued as the contagion spread. It took out Celsius, Voyager and friends, as some claimed that these bank runs were somehow the fault of the people who warned of their demise. Crazy.
And then, of course, we had the big daddy of them all: Scam Bankman-Fraud (SBF) and FTX. This kid put Bernie Madoff, Elizabeth Holmes and Enron to shame, combined. I’ll discuss him a little later in the “ugly” part (very fitting) but the benefit, i.e., “the good,” was multi-faceted.
It taught many people a number of key lessons:
- Crypto is crapto, and it’s not Bitcoin
- Not your keys, not your coins
- Altruist, wonder-boy nerds are more than likely actors and scammers, not saviors
And it took out an entire portfolio of shitcoin “companies” that Alameda had invested in by siphoning user funds through their accounting shenanigans.
Sure, the bitcoin price was slammed, but considering the level of stupidity that we saw, and the backdrop of fiscal tightening, bitcoin is doing OK.
A lower price has meant that the classes of 2020 and 2021 have been able to accumulate bitcoin like never before. They had their 2019 moment. Perhaps even their March 2020 moment (although I hesitate to speak too soon). I’m not sure many of them would ever have become whole coiners had this gift not fallen in their laps.
And, in addition to that, we saw the elimination or re-evaluation of a lot of the ridiculous Ethereum envy that we saw emerging from the technical fringes of Bitcoin. Many went from raising money at stupid valuations for ideas that quite frankly do not matter now, to being very, very quiet.
So, all in all, there was much pain, but like on leg day or, perhaps more accurately, like a hardcore detox and water fast, we’ve had a clean up of the industry. A flushing of much of the shitcoinery (not all of it, unfortunately, but a lot), a clean up of the froth in bitcoin, the minting of a whole new cohort of Bitcoiners, and the “earning of stripes” for the last cohort from 2020 onwards.
I’ve kind of killed my ammunition for this section because, if anything, it would’ve been used to point out what occurred in the aftermath of all the Ponzi schemes blowing up, and how they ran off with everyone’s money.
So, in the absence of pointing that out, let’s explore what else may have been bad about this year. At least in relation to Bitcoin.
It seems that central bank digital currencies (CBDCs) have moved closer to reality and are now well within the Overton window of economic discourse. This normalization is bad, because most people are stupid enough to continue supporting the very tools that will lead to their gulagification. The one saving grace we have is the incompetence of the institutions rolling this stuff out, but it may be balanced by the will to comply from the same people who fell for the lies of 2020 and 2021. It’s a shame that we’re all so politically and economically connected.
2. Delay Toward Hyperbitcoinization
This is a tricky one, because one day I believe we’ve been delayed, the next I think we have lightened the load and we’ll make it there quicker. I’m not sure where I stand, but there is a fair argument that says, “Had all of these stupid distractions and shitcoins not existed, and had the fraudsters not frothed and blown things up, perhaps 2021 and 2022 growth would have been a little more steady and sustainable — and we’d not have to go through this cleansing.”
It’s akin to the argument that you wouldn’t need to detox if you were more sensible with your diet in the first place. And this may be true. But alas, if society were a single human being, it would be an obese degenerate eating Cheetos and watching Netflix, who is in desperate need of a detox. Should we expect more?
This one is also tricky, because I have been a very vocal advocate of weeding out adversaries, spooks and stupidity through unfettered discourse, which at times can and should be toxic. But…. I’m at the point where I think it’s unhealthy — and I, for one, have been a culprit in making it that way. I think a lot of us took on the mantle of “toxic” a little too literally, and instead of being useful, helpful or inspiring, we’ve just turned into a bunch of keyboard-warrior trolls.
I no longer think this shit is healthy. Instead of fighting the enemy, we’re fighting each other. Instead of producing meaningful content, we’re constantly making memes — which, granted, are very, very effective pieces of content, but at this point, many of them are just “in jokes” and don’t serve anyone or anything outside of a small click.
That’s fine if you want to just spend your days trolling, but similar to my own personal and stupid tirades on Twitter and often controversial (and sometimes ridiculous) takes, they don’t help anyone. I think many of us are so frustrated (I was squarely in this camp for 2022) that we can’t have the impact we want, that we’ve picked targets closer to us. Perhaps that’s the effect that Twitter has on people. My hope is that the discourse improves, and I intend to start with myself and perhaps inspire others. Time will tell.
4. Wealth Effect Shattered
For many Bitcoiners, (I think) we’d made plans based on an increasing purchasing power and envisioned a style of life that a greater bitcoin price could accommodate.
I personally did. I went hard at the beginning of the year after a few changes in personal circumstances. I didn’t keep much dry powder and, as such, I thought I had completed the greater part of my stacking, and that any future additions (flow) would only be marginal in relation to my stock. As such, I was caught in a tight spot when I had to juggle getting married, with sourcing new forms of revenue and reinventing myself as a content creator, in the middle of a bitcoin bear market, among other things. I get the sense that I was not the only one caught off guard in that sense. I, and many others, managed to find a way through it, but in many cases, it was not an easy process and I think it may have added to the subconscious frustration that manifested on Twitter. I’m calling myself out here first and foremost.
Other than these four standouts, there was obviously further insanity in the broader geopolitical and macroeconomic landscapes.
The stupidity of the State continued to exceed all of our expectations, which leads me into the final section…
The ugly part of 2022 was the utter injustice of everything.
The world is morally, socially and psychologically broken. Up is down, down is up. Bad is good, good is bad.
The things I listed in “The Good” section have their ugly parts.
Alex Mashinsky and friends at Celsius, Voyager and others, after blaming Bitcoiners for their woes, paid themselves some fat bonuses and resigned to a healthy retirement. No ramifications.
The ramifications for Do Kwon? Unknown. He’s at large, probably living it up on some island, enjoying the money he scammed out of people.
Su Zhu and 3AC? Nada. Zhu returned to Twitter months after disappearing, to give people life advice in tweets as if nothing ever happened. I’m not sure if they embezzled or stole money, or just blew up from bad management, but from what I can tell, other than a little Twitter backlash, there’s been little justice.
And, of course, the absolute insanity of the SBF and FTX situation.
He was walking around, doing podcasts and Twitter Spaces as if nothing ever happened.
Prior to the blow up, the media hailed him as the next coming of Jesus, and what’s worse, after the fraud all came out, the media kept protecting his image! The sheer audacity and injustice of it all was maddening.
He straight up stole $10 billion and was lined up to speak at a finance event with Janet Yellen!
After a couple of months of this crap, he was “arrested” only to somehow post bail for $250 million, which, God knows where the money came from, and was recently seen flying around in business class to spend Christmas with the family, because he can’t get any vegan food in the prison he was in.
You can’t make this shit up. Steal $10 billion, go fly business class. Next step; Make him Time’s man of the year.
As I said, if any of this ugliness tells us anything, it’s that the world has lost its moral compass entirely. The evil are praised and bailed out in plain sight, while the good are locked up, and the key thrown away.
Ross Ulbricht is serving two life sentences for the alleged “crime” of building a goddamn online marketplace for consenting individuals to buy things from each other. The fact that the items are “illegal goods” as per the dictates of the State matters not. That’s just a ridiculous position set out by bureaucratic parasites who will often do the drugs themselves. Whether you’re pro or against drugs (I’m personally against them), the fact remains that Ulbricht took nothing from anybody and is suffering the severest of punishments for simply connecting people online, and protecting his business interests.
Edward Snowden is another example. Like Ulbricht, it’s not a “this year” thing, but he’s living in exile somewhere in Russia, as if he’s a criminal for “leaking” the truth to the American people.
And likewise, Julian Assange is rotting in a cell somewhere for literally reporting on the truth.
As Shakespeare wrote, “There is something rotten in the state of Denmark”
It’s hard not to get black pilled in the face of such absurdity. But I do believe there is some hope. My hope lies in the fact that, as I’ve said before, Bitcoin’s greatest impact on the world will be the reintroduction of localized economic consequences. The downstream effect of this, I believe, will be better governance and better, more just leadership — because without a money printer, you cannot paper over bad decisions and you are held to greater account.
I can only hope that such economic and mega-political impacts occur within the lifetime of people such as Ulbricht, Snowden and Assange, who are unjustly serving sentences for crimes not committed.
If not, then at the very least, it’s my belief that the era that our children or children’s children grow up in will be on a Bitcoin standard, and that such stupidity will be much harder to get away with.
It will be a more beautiful place in that sense, because beauty is a harmony and a symmetry.
Right now, the world is so out of center, so out of symmetry that we are seeing criminals walk free and fly in luxury, while heroes and leaders languish in cells.
And for those who want to claim that “beauty is subjective,” I’m sorry, but you’re either myopic or stupid. Beauty is an objective pattern, just like the fractals that exist from the microscopic through to the galactic.
Economics, society and civilization themselves are beautiful when they adhere to such symmetry and harmony.
It’s my hope that Bitcoin’s neutral, unchangeable presence will make beauty a reality once more, and I hope that by the end of the decade I am writing a guest piece called: “The Good, The Bad And The Beautiful” to commemorate how far we’ve come.
But, until then, we have a battle on our hands. So here’s to a better, more wholesome and meaningful 2023, where we each show up with greater strength and integrity than we have in the past.
This is a guest post by Aleks Svetski. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
6 January 2023 15:31