I was a few blocks away from the New York Stock Exchange when I first saw the Bitcoin Center. The first of its kind, a brick and mortar exchange for Bitcoin, just around the corner from Wall Street. Its price surge was covered in nearly every financial magazine in November 2013. A 10,000% return is hard to ignore, especially in a single year.
I became a stockbroker in my senior year of high school. Lehman brothers filed for Chapter 11 bankruptcy the day I started, so I was a skeptic since day one. Having seen my fair share of pump and dump schemes buzzing on the Street, I didn’t think this was any different. Front cover of The Economist? Check. Tourist groups asking about gold bitcoins — yes, the valueless physical coins? Check. Then there was the Bitcoin Center. Situated near one of the most famous streets of NYC, the scene was a modern version of Charles Mackay’s, Extraordinary Popular Delusions and the Madness of Crowds.
People chanted in front of the exchange, “end the Fed,” and raised their protest signs showing “Buy Bitcoin.” The noise was like most bubbles, but it was a special type of frenzy. It wasn’t just the excitement in people — it was their advocacy for change, and their belief that it was the solution. From those outside the exchange, to the Reddit and Twitter writers sharing their views on Bitcoin, there was a religious-like conviction unlike anything I’ve seen. Maybe that was the madness and delusion financial historians would write about. But whether it was delusion or not, I envied that kind of faith in an idea.
I walked further from the excitement, making my way toward the Brooklyn-bound train station. I approached the intersection of Wall Street and Broadway, where the street ends, right in front of the cemetery adjacent to the Trinity church. It’s a strange dichotomy where opportunity and death converge, like the street’s symbolism of risk and reward. Two hundred year history of extraordinary fortune and ruin, Wall Street is filled with contradictions.
It’s a place of incredible energy and a place of hope, but it isn’t meant to be pretty. It’s a crowded narrow street, obscured by rising steam from the ground, and further darkened with gray high-rise buildings blocking the sunlight. It’s a walk through financial history, and Bitcoin was writing its own without the need of bankers taking out their pens. A new form of money, a new form of economic power, beyond the control of the state — it represents the separation of state and money.
There I was, looking at Alexander Hamilton’s Gravestone at the Trinity Churchyard. I felt guilty for never looking at it. Four years of working across the street from the site, things are easy to overlook when they’re right in front of you. “Give all the power to the many, they will oppress the few. Give all the power to the few, they will oppress the many.” This is why Bitcoin is the most interesting financial asset of our time. It is not just a new form of money. It’s a political movement.
Currencies were my favorite topic to study in my macroeconomics class at university. But reading the history of currencies is vastly different from seeing devaluations develop in real-time. Trading currencies gave me that perspective. Now imagine waiting in a line to withdraw near worthless currency that’s devalued within years or months, or even overnight? That’s a real thing that isn’t appreciated by citizens in developed nations in the modern world.
Currency is not just a medium of exchange. Everything is a trade. Purchasing power extends far beyond what you could buy at the grocery store 10 years from now — it’s how much of another asset you could buy 10 years into the future. US Dollars probably won’t fade into worthless paper, but flip the charts upside down of major US stock indices and Bitcoin — that’s not just the strength in those assets, that’s also a reflection of the relative weakness in the currency you hold.
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Michael Maranslicht 