I Don't Know
And Neither Does Anyone Else
This is the first time in history that people have held digital assets at the onset of an invasion/war. So, if you are basing your opinion on whether these assets will go up or down in value during a war on what some talking head has to say about the situation, please know that the person to whom you are listening is speculating and is doing so based on no historical evidence.
I don’t know what will happen to the price of digital assets in the short term (or the long term for that matter), and I honestly don’t want to think about it all that much given how sad this crisis in Ukraine is and the potential damage that the world may incur as a result of it. Words like “nuclear” are now being thrown around. Absolutely terrifying.
But since this is a newsletter focused on finance, I will say that I’d be prepared for the value of your positions to get cut in half just as quickly as they could double. (And, if they double, maybe consider giving some of your gains to those who are suffering and will suffer as a result of this current conflict.)
The bigger questions in my mind right now are “What role will crypto play in the world moving forward?” and “Do I want to be a part of these digital asset networks?” The answers that I have come to aren’t so simple. If Russia really can use bitcoin to circumvent sanctions, then that is bad (and bearish, IMO). The people on Twitter or YouTube who are either outright cheering for such a scenario (or “just stating that it might happen”) because they want the price of bitcoin to skyrocket are gross.
Maybe the only things grosser are the Republicans in this country who still support Putin and our former cowardly “leader” who also loved to praise the man who is potentially in the process inciting World War III.
And maybe right behind them is the MSM - both Fox and CNN - continually beating the drum of war. It’s all nauseating to watch.
But back to the sociopath crypto influencers… I spent some time making some changes to who I follow on Twitter in the last three days. I’ve unfollowed a number of crypto cult leaders and have begun to follow more independent Ukrainian journalists and news outlets like the ones below.
And on the topic of the Tweet above, it really is important to be mindful of the second and third order consequences of killing Russia’s economy by cutting it off from the SWIFT payment system.
I’m not saying that the U.S. and its allies shouldn’t do this; I support the sanctions, but I’m also saying that we should be mindful of their unintended consequences.
Some of those consequences will also be the financial crippling of innocent, everyday Russian people. Obviously, the blame for this falls squarely on Putin, but it doesn’t make the reality any more palatable.
I spoke with a friend of mine in Russia, a single mother, just the other night and she is petrified. She used to be a journalist there, and she is completely against the war. Her and her daughter will likely suffer as a result of these sanctions, and if I can help her by sending her bitcoin, I will, which brings me back to a point I began to make earlier about digital assets… Using them to send desperate people money is an obvious pro, while Russian oligarchs using them as an escape valve is an obvious con.
Vulnerable countries using digital assets to fundraise for their defense forces is a pro.
Knowing that less-than-high-quality people can fundraise for their really shitty/scammy/terrorist activities is an obvious con.
Again, I have mixed feelings about digital assets right now, and that’s okay. At the end of the day, I have done my homework, and I know why I hold what I hold. And if I feel its time to change my mind about what I hold, I will. I say this because if you haven’t done your homework and you don’t know why you are holding what you are holding, my guess is that there is a decent chance you will get shaken out of your positions. Investing is voting. Just like voting, you should do it with conviction and with an understanding of the risks of what you are “voting” for. So, please, trust your gut and manage your risk properly. I’ve said it since the first edition of this newsletter - I am not a financial advisor and nothing in this newsletter is financial advice. No one else that you are listening to via either MSM or independent media is a financial advisor either. Do your own research, think for yourself, manage your risk, and, if your investments do end up paying off big time, consider helping the less fortunate.
Best,
Frank
Twitter: @frankcorva
