The following column originally appeared on CapitalWatch
“And so it has come to pass.”
That was a text I received on Wednesday from my creative partner on Obamaland, a satirical comedy now on Amazon Prime, and a film I promote whenever I can get away with it.
In my October article titled “Political instability and Market Stability,” I pointed out that the market is divorced from politics and that, despite political instability, the market will hold. This thesis was predicated on the assumption that both investors and non-investors alike already know that our democracy is broken.
Indeed, whatever faith in our system remained, Trump has worked tirelessly to erode. President-elect Joe Biden can speak in good faith ad nauseam about how this week’s ghastly display does not reflect who we are as a nation—that somehow the exceptional American character that fawning Frenchman Alexis de Tocqueville described so eloquently is still within us— but we all know that this is just not true.
And so it has come to pass.
Sadly, the tribalized lunacy satirized in my film played out in real life this week, as “protestors” attacked the Capitol Building in DC, shouting at phantoms and taking selfies. Four people died, including a female Air Force Veteran, who was shot in the chest by police. (By the weekend, an injured policeman also tragically fell.)
And yet on that very same fateful day, the stock market rose as our standing in the world fell. As the United States suffered the most daily Covid-19 deaths since the pandemic began, and the very citadel of our Republic was attacked, the S&P and the Nasdaq soared while the VIX slid.
And so it has come to pass.
And what about the VIX run-up before it fell? Was that really a fear of volatility or just investors jumping into the VIX for momentum as unthinkingly as I jumped back into Bitcoin?
Note: I bought back into Bitcoin at 30,000, and saw it run up to 40,000 and still haven’t sold after it went down. Why? Because Bitcoin is going to be maybe my best trade and I still barely understand what it is. Nor do I care. But we will cover Bitcoin in a bit. First, a few more words on the DC insurrection.
Let’s start with the woman who was shot. Now, fact that she is a veteran (or her character more generally) is totally irrelevant. Either way, if you break into a government building in a mob of people, the police officer, being able to argue he could have been overrun quickly, is going to shoot you. And whatever your political views, just know that if you punch a cop with a gun, expect a cop to return fire, not a punch. A gun, remember, is on the table during such an encounter, and it takes but seconds to grab said gun and shoot said cop. Can I say this? And does it matter that I was shot by an ex-law enforcement agent (former Deputy DA) for the crime of defending myself in a fistfight he started and thus have more skin in the game than likely anyone you know? Can I say that, for this reason among others, that I am not reflexively pro-police? Can I say that? Can I also say that this delusional woman’s death is both worthy of mockery and pity? Can I say that media outlets, depending on their audience, covered her death entirely differently—as they have done consistently in covering police actions even during similarly chaotic riots?
Of course, this direct attack on democracy is unlike anything we saw all last year. And the Republican Party is and should be finished after this episode. But can I also criticize left-leaning media for not even asking whether her death was justified? Can I say there is a profound absence of empathy in this country across the political spectrum while also saying that Rudolph Giuliani should be in jail and everyone this week on Capitol Hill sent straight to Bellevue?
Wait, I have more questions…
Can I say that I sympathize and support protests for racial justice but disagree with some of the propositions on which BLM is predicated? Can I say that George Floyd was murdered but Michael Brown was killed justifiably? At least according to President Obama’s Justice Department, anyway. The investigation also showed, however, that the Ferguson police have engaged in discriminatory policing toward African American residents. Both things can be true at the same time. Can I say that? Can I also say that what happened this week was no less than a direct incitement of a violent overthrow of the legislature by a sitting president, an act of sedition for which he should spend decades behind bars?
Not in this country. Not anymore. You must choose a cult.
And so it has come to pass.
While there is no moral equivalence to the mass BLM protests and Wednesday’s insane insurrection, coverage of this incident is more evidence that we have become a nation of cults. There is the Trumpian / QAnon cult, and, there is the Cult of Wokeness. The Cult of Trump, of course, is the largest and most dangerous. Tens of millions of people adhere to it to varying degrees. And they have a leader, a leader in whose name they are willing to destroy democracy in order to, in their minds, protect it. Moreover, it is a cult that make no sense. A cult whose members claim to be the forgotten and downtrodden, while also claiming that Trump has made America Great Again, improving their lot and giving them a voice. Trump, of course, has repeatedly exacerbated any divisions, setting us all aflame.
And while racism is a real problem, unlike imaginary election theft, it is still worth asking yourself: “Am I in a cult?” Such was the question author Sam Harris challenged listeners to ask themselves this week. Ask yourself: “Am I excusing rioting for one group and not for another?” Remember, before DC there was CHAZ. How did you feel about that? And, more importantly, what do you say you felt about it?
Now, it is true that one man’s freedom fighter is another man’s terrorist. And terrorism is in and of itself a tactic, not an ideology. It is not inconsistent to be a supporter of the IRA and not a supporter of the PLO—or vice-versa. But it is dishonest to say that you disapprove of violent tactics as a matter of principle if you indeed do not. So, ask yourself: “Do I approve of violent tactics to enforce changes I deem necessary?” Be honest and state your case, rather than post, in Buzzfeed-like fashion, articles laden with cherry-picked photos designed to pettifog the issue. Do you or do you not believe that silence is violence, but rioting is not? If yes, then have the courage to say so. If no, then have the courage to say that.
And so this must come to pass.
Yet I fear we are too far gone for that, too comfortable in our increasingly self-reinforcing echo chambers. But while chaos and political instability will continue to rise, the good news is that Bitcoin will continue to rise with it. And most importantly, you can trade it anywhere, anytime.
The Banana Republic Banks on Bitcoin
Unless you are reading this from your own private island (as flattering as it would be odd) chances are you didn’t buy Bitcoin at its initial pricing of 327. Or, if you did, you didn’t’ sell it in 2017, the year that saw the crypto coin jump from under 1000 to over 19600. In 2018, Bitcoin saw a precipitous decline. But last year, the “currency” blasted back onto investors’ radar as a refurbished and shimmering must-have for any investor. While some say this latest meteoric rise will lead to another crash, others say this time is different.
The difference lies mainly in perception—and with a change in perception, institutional investment. Hundreds of millions have poured in from institutional investors and hedge funds. Even traditional banks have begun to view this former fad as a “real” thing. And PayPal’s adoption of cryptocurrency trading on its payment platform has done wonders to increase its popularity and improve its legitimacy. There are rumors now that an exchange-traded-fund for Bitcoin will come to fruition in 2021, further its cementing Bitcoin as a legit long-term play in investors’ minds.
Ironically, however, the more investors flock to Bitcoin because it is an illiquid and volatile investment, thus offering huge returns and a hedge against market or political uncertainty (like gold), the more its potential as a currency and payment technology is undermined. As Alice Fulwood of The Economist Radio said this week, “If anything, the dynamics that are pushing Bitcoin towards being a mainstream investment, are pushing it even further away from becoming a legitimate currency.”
Either way, the era of Bitcoin and cryptocurrencies has truly arrived.
And so it has come to pass.
If you are unsure about Bitcoin, you probably object because you do not think it is real. You would be right. But you could say the same thing about all currencies nowadays, which are nothing more than devised demarcations of value that hold no more inherent value than the paper they are printed on. Untied to gold or anything other mineral or material, money is worth only the value we put on it collectively. And even before former president and all-around good guy Richard Nixon took the U.S. off the gold standard, money was only worth what gold was, a yellow metal we have always valued mainly because it looks nice.
Copper is essential in keeping the engine of the modern world running; gold is essential in keeping fiancés from running away. (Used as the currency of choice for millennia upon millennia, in 560 B.C., the Lydians in present-day Turkey were the first to figure out how to separate gold from silver, and so doing created the first truly gold coin.)
When it comes to each tradable cryptocurrency—transaction speed, supply, and applications are the three main things crypto-curious investors should consider.
But while some offer more supply (Litecoin’s maximum supply of 84 million coins is four times greater than Bitcoin’s) and some are faster (Ethereum’s block time or transaction speed is measured in seconds, Bitcoin’s is measured in minutes), Bitcoin is still viewed as the most legitimate, reflected by its unrivaled market capitalization. As it stands now, Bitcoin will keep rising on this perception of legitimacy, while the altcoins are a riskier and more volatile play. Still, expect contonued resistance at 40,000, and more resistance around 50,000.
Until the others are viewed with equal legitimacy, I am devoting most of my crypto portfolio to Bitcoin. The remainder goes to Ether and Litecoin. I missed the boat on Dogecoin, a holiday boom when the cheap altcoin rose over 100% in 24 hours, spurred on by a Tweet from adult film star and long-time investor in Dogecoin, Angela White.
Yes, a porn star’s investment-advisory tweet brought some investors closer to retirement. This is the world we live in.
And so it will come to pass.
The preceding article is from one of our external contributors.
It does not represent the opinion of Benzinga and has not been edited.
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