For the past few days, or the past few weeks really, every time I open coinmarketcap, this song pops into my head.
It’s a campfire song I learned as a kid and it’s called “The Grand Old Duke of York.”
The song goes like this:
Oh, The grand old Duke of York,
He had ten thousand men;
He marched them up to the top of the hill,
And he marched them down again.
And when they were up, they were up,
And when they were down, they were down,
And when they were only half-way up,
They were neither up nor down
So what does a campfire song have to do with the crypto market?
If you’ve been following the crypto markets at all and for more than a few days, you probably already have a good idea where this is headed.
This week the crypto markets were definitely down (when they were down, they were down). Most assets are recording massive declines from a bullish run in early January (when they were up, they were up).
But really, maybe we should be focusing on where they land when they are neither up nor down. After all, if you zoom out and look at the charts for a year, or longer, the bold trend up and to the right continues.
Why are crypto markets so volatile?
Look, the overhaul of the global financial system will probably not be a smooth and comfortable transition.
There will undoubtedly be bumps and bruises, and one of the main manifestations of that, right now, is the volatility of completely new kinds of assets as they enter the market.
As the stability of the underlying crypto infrastructure develops, and as more best practice and good governance becomes accepted, and as more regulations are adopted, then we might see a more even cadence to the growth of the crypto sector.
But for now, on a daily or weekly basis, the dramatic crypto market moves will probably continue.
Crypto market moves matter, but need context
So, you have probably also noticed a crazy trend that happens when there are major crypto market moves.
First, the mainstream media portrays major gains and losses like sheer insanity taken over and everyone and their brother is buying some bubble asset that has something to do with tulips.
What often lacks from these reports or the headlines at least, is some level of complete picture or understanding of the economics underpinning the growth or decline (and granted, you could make the argument that nobody really knows what’s going on), but at the very least, some context could help.
On the flipside, we see a lot of experienced hands also flaming these misconceptions. They share things like “There’s blood in the streets.” I get the sentiment, but after you hear it after a few dips, it becomes the kind of thing that is easily tuned out without losing much.
And somewhere in the middle, we have a group that repeats, like a mantra, “market value doesn’t matter, the technology will change the world.”
While I appreciate the sentiment, I do think it doesn’t help to pretend that the markets are not relevant. After all, increasing crypto market values is what helps with adoption outside of traditional tech and finance circles.
Instead of reporting that the crypto markets are in complete chaos, or that the markets are irrelevant to the coming crypto utopia, it might be best to counsel investors and could-be adopters to take the long view.
But, I imagine this dynamic of the crazy responses to crypto market movements will continue. It’s kind of like the extra stanza that sometimes gets added to the “Grand Old Duke of York.”
Oh, a-hunting we will go,
A-hunting we will go,
We’ll catch a fox, and put him in a box,
And then we’ll let him go.
Also published on Medium.