The World of Crypto

Who doesn’t love a sequel? Raymond Hawkins sure does, and back by popular demand for another episode of fantastic industry insights, Fred Thiel, CEO of Marathon Digital Holdings, joined the Hawk to talk about all sorts of things. Top of mind was how current events are shaping the crypto community and how crypto could impact the events unfolding in Europe.

The current state of affairs could provide a new test for digital currency. Thiel pointed out in past wars; displaced citizens did not have many options for moving their money. “Crypto provides a unique thing in this world where sanctions have become essentially a weapon and weaponized,” Thiel said. In the matter of the war in Ukraine, the United States and its allies have used sanctions to shut off Russian access to banks. The only other bearer asset available for many people and businesses in this scenario is Bitcoin and other cryptocurrencies.

One might ask if Crypto is a solution to transferring assets, could Russia use crypto to avoid sanctions? Thiel said that the daily trading of cryptocurrency and the total market cap prevents this idea from being scalable. “As a tool for sanction evasion, Bitcoin is not a good option,” Thiel stated.

Since the start of the war in Ukraine, one trend is the decoupling of the correlation between bitcoin and equities. “All of a sudden, now there was a real use case for bitcoin that was very actual and urgent, and so you started seeing bitcoin move in the opposite direction of equities. Even bitcoin-related stocks which track the price of bitcoin started moving separately. So, there were days when the Dow and the Nasdaq would go down, yet bitcoin would go up, and you saw the Nasdaq-traded, bitcoin-related stocks, Like Marathon, for example, move in lockstep with bitcoin.”