Sam Bankman-Fried, the founder of bankrupt cryptocurrency exchange FTX, arrives at a court New York as lawyers push to persuade the judge overseeing his fraud case not to jail him ahead of trial, on Aug. 11.EDUARDO MUNOZ/Reuters
Some years back, I attended a meet-and-greet with the newly appointed chief executive of the oil company Cenovus, Alex Pourbaix. (He has now given up that role to become chair.) At the end of the on-the-record session, Mr. Pourbaix made a joke that I view to be at least half serious.
Mr. Pourbaix, who had previously been at the pipeline company currently known as TC Energy Corp., was talking about the difficulty of building such export ducts in this country, which affects the prices oil producers can fetch for their product. The pipeline-approval process is one that critics have said often becomes political and subject too much to optics. While I don’t remember Mr. Pourbaix’s exact words, it went something like this: “The best thing for us is if you guys stop writing about us.”
This is impossible, of course. In this age, there are no absolutes. There’s someone somewhere writing about any topic (look up “rule 34,” but don’t say I didn’t warn you). What I think Mr. Pourbaix meant is that oil will have an easier time if it is no longer such a hot-button, polarizing issue, with an intense public glare on it.
As it is for oil, so it is for crypto. While the underlying rationales are different, that comment by Mr. Pourbaix applies aptly to the current situation in crypto.
Molly Jane Zuckerman, one of the founders of the Association of Cryptocurrency Journalists and Researchers, recently wrote that “crypto is boring right now.” And that is good.
I remember exactly where I was when news broke last year that FTX’s Sam Bankman-Fried was arrested in the Bahamas, after the poster boy of crypto crashed and burned spectacularly along with his billion-dollar exchange platform. I was at the Report on Business holiday party. For a few moments, everyone around me was on their phones, and it was all we talked about.
It was a big deal at the time. The big pension fund that invested in FTX was suddenly under a harsh spotlight. Universities that accepted Mr. Bankman-Fried’s money were under pressure to hand it back. Various versions of “Can crypto ever recover from this?” filled the headlines.
Fast forward to Mr. Bankman-Fried’s trial now in New York, where he faces fraud charges for the disastrous way he ran FTX. With war and havoc all around in this world, do you even know that crypto’s trial of the century is going on?
There’s been a lot of drama, including a moment when Mr. Bankman-Fried’s ex-girlfriend, Caroline Ellison, excoriated him on the witness stand and all but guaranteed his conviction in the eyes of some observers. It was poetic justice after Mr. Bankman-Fried had leaked Ms. Ellison’s diary to the media in what the prosecution called an act of witness intimidation.
Media have still been reporting all that. And the author Michael Lewis released a big book on the matter.
But the public’s appetite for all that has come down considerably from what it once was. Google searches for the matter are drastically off their peak. For the term “FTX,” for example, Google gives it a score of three currently, versus 100 at the saga’s peak. In mainstream newspapers, trial developments have been relegated to dark corners, such as page B13. Once the verdict of the case comes, there will surely be another wave of mainstream curiosity, but that will probably be it.
Simply put, we have grown not just tired of Mr. Bankman-Fried and his antics, but tired of crypto altogether.
Take the following bits of news: Alex Mashinsky – the owner of the Celsius crypto platform that collapsed last year, which everyone was talking about pre-FTX – has been arrested. Su Zhu, founder of Three Arrows Capital, another such platform, was recently arrested as he tried to leave Singapore. Touch your heart and tell me: Do you know, and do you care?
Meanwhile, there are a lot of crypto developments that have gone under the radar. Observers are hotly anticipating a U.S. decision on exchange-traded funds based on bitcoin. Ethereum, the blockchain computing platform, has had all manner of network upgrades, significantly boosting its utility; bitcoin itself has undergone similar transformations.
This lack of wider public interest seems to be the best thing for crypto. Prices, if you haven’t been paying attention, have been doing well. The price of one bitcoin touched US$30,000 on Friday, and it has been up more than 70 per cent for the year. Bitcoin has clawed back all the value that it had lost because of FTX, Celsius and all the other collapsing crypto operations.
A core metric of market activity, what portion of the market value of crypto is bitcoin, is showing unusually high bitcoin dominance. This means that crypto people have been buying bitcoin and selling their dogecoins, random other coins and coins that are colloquially called a name I can’t write in this newspaper (it starts with an S, references excrement and rhymes with “bitcoin”).
That usually indicates a market bottom, whereas mania and a bubble are usually indicated by the reverse, if non-bitcoin crypto forms a high portion of the value in the market.
In Better Call Saul, Mike Ehrmantraut comforts the titular character after a traumatizing incident, saying that some day he would forget it and move on. Saul Goodman later repeats that to his wife after their own traumatic incident. Inherent in what they say is that this threshold will be crossed when least expected, unnoticed.
“One day,” Mr. Goodman says, “we’ll wake up and brush our teeth and go to work, and at some point, we’ll suddenly realize that we haven’t thought about it at all.”
For crypto and the wild darkness of the FTX saga, that day has come.
Ethan Lou