The Facts
After months of declines and a recent drop that have erased a combined $1T in market value, traders of bitcoin and other cryptocurrencies are grappling with the prospect of further losses if the stock market contagion spreads.
The price of bitcoin, the original digital asset, has crashed in recent weeks to below the key $30k threshold, dragging down other cryptocurrencies and digital assets across the board.
The Spin
Narrative A
Let's step back and look at the big picture here: crypto is still an emerging asset class, much like tech was in recent decades. People mocked tech when the Nasdaq crashed during the dotcom tech bubble, but ten years later Nasdaq recovered, and Big Tech has reshaped the world - bringing enormous returns in the process. It's far too soon to dismiss crypto.
Narrative B
Bitcoin isn't the problem here. Algorithmic stablecoins are. The backers of these "pegged" cryptocurrencies are using their Bitcoin reserves to try and prop up their failing currencies just like so many emerging market countries selling off their gold to save their fiat. Bitcoin is an innocent bystander and, like gold, it will live to fight another day.
Cynical narrative
Bitcoin, like other so-called cryptocurrencies, is not an asset, a unit of exchange, or a commodity; it has no underlying value and is best described as a global, digital Ponzi scheme. Its sole function, it seems, is to transfer wealth and undermine the authority of governments over economic life.