1/ Off Topic: What are governments ultimately going to do about cryptocurrencies?

The recent Twitter hack popped onto my radar for a different reason than most -- which is that it provided another example that could appear negative to the use of crypto (like #Bitcoin )...

2/ I know crypto being used for illegal activity is nothing new, of course. Beyond black market transactions, it's also used for for ransomware attacks. That doesn't mean it is inherently bad or that the creators ever had this in mind.

3/ But for the most part, the average layperson doesn't hear much about these things... that is, until events like this Twitter hack happen. Now there's a very uncomplicated connection between the hacking of a familiar platform and how the bad guys made off with the money.

4/ This by itself will likely not result in anything happening to crypto. After all, it is estimated they picked up $120k. While not insignificant, it is hardly a comparison next to the millions taken via ransomware attacks. Yet it makes clear this kind of thing is possible.

5/ That said, I do think it's quite likely there'll be a point in the future where we'll be reminded of this hack alongside many others as a reason we need to better regulate crypto. After all, regulators would say, we can't let the hackers win.

6/ Exactly which countries and what regulation will be ahead is hard to say, of course. But that it will happen seems inevitable to me the more we get events like this.

But there is one other reason I see the greater likelihood ahead...

7/ Without getting into deep economics speak, I'll just say that I'm confident we'll have an inflationary phase down the road given the volume of money creation in play by central banks to take us through the pandemic. It's timing depends on many factors which I won't go into...

8/ But as with all times where countries are reliant on maintaining value in their fiat currencies, there's often an effort to prevent exchange by other means. In other words, direct trading with other currencies or commodities is typically discouraged in this tough situation...

9/ Crypto with a fixed amount is exactly the opposite in that there isn't more creation. Thus, if demand continues to increase, the "price" of it will go up substantially. That is, unless regulation either (1) limits the crypto's use and/or (2) reduces its attractiveness

10/ My larger point is:

1) Crypto prices will likely rise where the value of the currency against it is falling (not revelatory, but key to understand).

2) Governments will feel pressure to limit (1) above, but the when and how is a tough question to answer...

11/ But I'd bet this much -- when they do, they'll point to the hackers and ransomware attacker events as a cornerstone to the decision. It's easy to imagine by that point we'll have many public hacks like this one on Twitter that will be regularly referenced for laypeople.