As sceptics raise doubts about the thin trading volumes and the potential for market manipulation in the cryptocurrency sector, experts reveal what could lie ahead for Australians who own the volatile currency.
Businessman Mark Carnegie still believes in cryptocurrency, likening it to the “honey badger” – a reference to a famous internet meme video featuring the “bad ass” African mammal shrugging off fights, snake bites and bee stings.
According to a survey run for crypto exchange Swyftx, as of August, 23 per cent of adult Australians owned crypto, up two per cent from last year. Those who held onto their coins – “hodlers”, in crypto slang – have seen their losses reduced, with the Bitcoin price rising from a low of to hit $55,000 this week.
However, regulators have started to take action, with the Albanese government putting forward laws last month that would require crypto exchanges to hold a licence just like regular financial services companies do. Carnegie, who runs two funds that invest in crypto and the crypto ecosystem, believes that the crackdown was inevitable.
The likes of exchange Binance and Tether, a so-called “stablecoin” whose price is fixed to the US dollar, may not be able to survive the new regulatory environment. Binance, which has up to 280,000 Australian customers, and its boss, Changpeng “CZ” Zhao, this week pleaded guilty in the US to deliberately breaking laws designed to curb money laundering and terrorism finance and agreed to pay more than US$4bn ($6bn) in fines and forfeiture of profit. Tether has repeatedly failed to deliver on repeated promises to provide a full audit of the assets that are supposed to back up its US$1-a-coin price.
Carnegie believes that Bitcoin is “basically a religious cult” and is interested in Ethereum, which he says has the potential to replace the international bank payments system, Swift. He also likes “everything else” in crypto as a potential antidote to banks pushing “their ESG liberal bullshit agenda across the world” and refusing to service people like Right wing UK politician Nigel Farage.
Other believers in Australia include the co-founder of comparison website Finder, Fred Schebesta and Liberal Senator Andrew Bragg, who did a podcast series with Schebesta last year and took a Binance-funded trip to San Francisco.
However, Todd Sarris, the managing partner of Sydney-based business advisory group Spartan Partners, believes that the level of crypto interest has decreased since the incredible crypto collapses of 2022. He does not think any democratic government will ever support crypto over its own sovereign currencies, and points out crypto is banned in China, taxed at the highest possible rate in India, and out of reach of the world’s poor.
David Gerard, the author of two books on cryptocurrencies, says the market is thin, allowing the price to be manipulated on the cheap by bad actors. He thinks the venture capital caravan of hype that helped fuel the crypto boom has moved on to the next hot thing: artificial intelligence.
Gerard remains completely unconvinced, saying that Bitcoin “doesn’t do anything – all you can do is try to dump it on the next sucker.”
