Is it a bird, is it a plane, is it crypto or Kryptonite? Jim Duffy comment

I was chatting to a friend last week who enquired about my affinity to Superman.

Bitcoin and crypto are still to some as Kryptonite is to Superman, says Duffy. Picture: Warner Bros/DC Comics/Kobal/Shutterstock.

No, unfortunately I look nothing like the late Christopher Reeve, who for me is the best actor who donned the red cape and blue tights. It was more my passion for Kryptonite that she was referring to.

And by that she meant cryptocurrency. But it drove home the point to me that many of us still have no real idea about crypto or what it does or means.Suffice to say, a deep and meaningful conversation took place on cryptocurrencies, blockchains, digital exchanges, Bitcoin, banks and a whole load of other related stuff.

I feel I did a good job in “educating” her on what all the fuss is about. Mind you, she still didn’t enlist on any digital exchange and she never bought a Bitcoin. But, lo and behold, she’s all over it now…

We’ve seen it all before, right? Bitcoin, the primary digital currency that gets all the press, rose by $1,000 (£773) on Monday. That was a 10 per cent rise in a day. Suddenly crypto hit the headlines again. The fear of missing out raised its ugly head and punters were queueing up to either stick a few bob in or top up their current “bags”.

“Portfolio” is no longer trendy in crypto-speak. One keeps one’s holding in “bags” these days. The heavier the bag, the more it’s worth or could be worth in the future. But is this Bitcoin rally just another flash in the pan?

Well, I also spoke to a very decent financial adviser this week. The subject of Bitcoin and crypto came up and within a millisecond he changed from David Banner into the Incredible Hulk. In short, he got very angry. To be fair, it was a bit over the top.

But I had to listen to his rationale for Bitcoin etc all being a load of tosh. Built on nothing by scallywags who would again fleece Joe Public once they all got into “investing” in it.

And I could not argue with what he said. Unlike a very decent fund, he ranted, like FundSmith that invests in top-drawer companies after deep clinical research by a bunch of analysts, Bitcoin is built on thin air. And so the berating went on. I finished my coffee and hung up the Zoom call.

Musing

He was dead right and dead wrong all at the same time. While it is all good and well to chat and muse about Bitcoin or the whole host of cryptocurrencies in the top 100 by market cap on Coin Gekko, I would not advise anyone to take their pounds and pennies and stick it on a cryptocurrency.

Firstly, I am not a financial adviser, and secondly, I have no clue what Bitcoin will do in the next 12 months. But, all that said, there is a head of steam building around the new, wider crypto-community.

That steam is not building up in a crypto echo-chamber. No, rather it is building up in traditional regulated spaces that one would never had dreamt crypto would ever be allowed to play in. Of course, Mastercard, Visa and now PayPal are getting into the crypto-sphere, as they will within time, offer cards and services built around cryptocurrency.

PayPal is about to enter with a bang at some point. Its co-founder, Peter Thiel, has invested in small but audacious projects like Reserve coin. So, he knows that crypto is in the wind and if PayPal doesn’t get on board it will be left behind. But the big one that everybody missed is what took place in the US last week.

In short, proper, pucker American banks will be able to offer cryptocurrency custodial services to their customers. What this means is that banks can offer and store cryptocurrency along with dollars. Imagine one day opening up your banking app and it shows your balance in pounds alongside the two or three cryptocurrency coins you are holding. That is only a matter of months away now in the US. The UK will be sure to follow.

So, while Bitcoin and crypto are still to some as Kryptonite is to Superman, they are moving in a direction where adoption is becoming more widespread. Who knows, by next week Bitcoin could be down $2,000 and it will all be a storm in a tea cup. For now…

Jim Duffy MBE, Create Special

SCOTSMAN.COM

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