CoinDesk Global Macro Editor Emily Parker tracks bitcoin’s recent price drop-off after last week’s record high and Taproot upgrades, China’s cracking down on cryptocurrency mining, and Barbados’ intention to build an embassy in the metaverse.
Video Transcript
JARED BLIKRE: As the US dollar surges higher, one victim, crypto prices, which crashed overnight, wiping out over $400 billion in market cap value. That’s after reaching $3 trillion just about a short week ago. We want to break down all the price moves with Emily Parker, the CoinDesk global macroeditor. And Emily, it seems like only– was it a week ago, two weeks ago, we were at record highs and now Bitcoin briefly trading below 60,000. What’s going on here?
EMILY PARKER: Well, if you ask three different people, you’ll get three different answers for why Bitcoin fell. So there are a few theories around, floating around. One is, as you just said, the strong dollar is leading to a decline in Bitcoin’s price. The other is, there was another announcement from China, the NDRC basically calling mining extremely harmful. This is not really a new thing, but they sort of reiterated their dislike of crypto mining. And the third is you had Twitter, the CFO of Twitter, saying that they were basically ruling out investing their cash holdings into cryptocurrency because of volatility.
So those are three different reasons that are floating around. But the truth is, is that Bitcoin is a roller coaster. It’s volatile. And I think, actually, the larger point here is that we really were just seeing a surge due to some factors that seemed like were likely causing Bitcoin’s rise, for example, the first ever Bitcoin futures ETF in the United States. And then Bitcoin also seemed to react to the inflation numbers. So but I think what’s happened over the last day or so, it’s going to– you’re going to get different answers.
JARED BLIKRE: Yeah, price in search of a narrative. I also want to talk to you about another story I know you’re tracking today, which is Barbados. This country is set to become the first in the world to recognize a digital sovereign land. They’re talking about putting an embassy in the metaverse, very crypto friendly. And it’s interesting, you know, there’s another dollar tie in here. You think about what happened in El Salvador adopting Bitcoin as its official currency. That is a country that’s dollarized, pegged to the US dollar, loaded up on IMF debt– Barbados also dollarized. I’m wondering if there’s a similarity there.
EMILY PARKER: That’s really interesting. Yeah, I think we’re just going to have to see how it plays out. I think the other similarity between Barbados and El Salvador is that sometimes you have these countries, and they’re the first to really jump on a new crypto trend. And it’s actually a pretty savvy move to attract investment and to just get a lot of outside attention and to just sort of create this impression that you are leading in innovation.
So I think that that’s another similarity that these two countries share. I mean, we don’t really know what it means exactly to put an embassy in the metaverse. But it’s clear that the metaverse is just something that is not going away. I mean, we see Facebook getting into the action. So, yeah. And I think part of it is just making up the process of diplomacy a little bit more efficient, digitizing certain elements of it, but I think there are a lot of questions about how exactly this is going to work.
JARED BLIKRE: Yeah, I think the bottom line is we’re all just kind of figuring this out on the go. Emily Parker, always great to see you, CoinDesk global macro editor.
