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Good morning. I’m Andy Rosen, senior assistant business editor at The Globe. Today, I’m sharing a conversation that might help you understand the mind-boggling resurgence of cryptocurrency. But first:
TODAY’S STARTING POINT
Bitcoin is a popular form of cryptocurrency. Paul Yeung/Bloomberg
Bitcoin? Again?
It’s the shiny investment object that just won’t go away. Last week, the flagship cryptocurrency blasted past $100,000 — a number you probably wouldn’t have believed when the pandemic crypto craze abruptly sputtered in 2022.
Somehow, crypto has managed to thrive despite widespread public pronouncement of its frivolity.
So what gives? I asked my colleague Esmy Jimenez, of the Globe’s “Money, Power, Inequality” team (and my personal finance buddy), to think it through with me. An edited transcript of our chat follows.
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Esmy: Wait, why are we doing this? I thought the crypto era was over?
Andy: You’re not alone! Unless you’re in this particular corner of the economy/meme-o-verse, you might have last seen crypto prices plummeting in 2022. The collapse of FTX, a crypto firm, seemed to confirm for many people that the whole thing was the fraud they’d thought it was.
But it skyrocketed again this year for a few reasons:
Esmy: What I don’t totally get is why it’s still going … like I was interested in it at one point but didn’t feel like I knew enough to really take the plunge.
Andy: I’ve covered crypto for years. The market has pumped and collapsed on several occasions. But ultimately, there are a lot of people who are willing to pay money for it, even in the bad times.
Crypto is simply a digital asset that uses blockchain, a digital ledger, to keep track of – and verify – transactions and balances. Some crypto enthusiasts are zealots who believe money should not be controlled by banks but by the people who use it. Without getting into all the technical mumbo jumbo, cryptocurrency uses cryptography to protect the data in what users agree is a tamper-proof way.
Then you have people who want to use that underlying technology to build new types of products and financial instruments. Finally, there are those who just want some high-risk, high-reward investments.
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There are ways to spend cryptocurrency in the real world. Some merchants and payment processors accept it — but the prices of these assets often swing wildly enough that people can be reluctant to spend it on routine items. A lot of people just hold their crypto in hopes that it will increase in value.
Esmy: Mmm … there are also the curious newbies like me who are just watching it. It sometimes feels kinda scammy, no?
Andy: Crypto is absolutely scammy in places. The tech is well suited to anonymity, so it’s relatively easy for ripoff artists to get away with stealing from newbies.
On the other hand, there’s about $3.68 trillion tied up in crypto today. That’s about what Apple is worth. Apple! So whether or not you believe it should be worth something, it is.
I dumped some of my spending money into Bitcoin in 2022, and it’s worth more now. But that doesn’t tell you whether I was lucky or good!
Also, not all crypto assets are the same. Please don’t be like this guy, who said he lost a fortune on a meme coin — a form of crypto based on an internet meme or some pop culture spectacle.
Esmy: Oof yikes. It’s so hard to not dunk on that person.
Andy: You can also screw yourself gambling on individual stocks or starting a small business that fails.
Esmy: And those people don’t get dunked on. But at least hopefully you have a business plan.
Andy: My personal rule: Don’t wager more than you can afford to lose. I think you and I both have most of our investments tied up in the most boring thing possible: target date retirement funds!
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Esmy: Hey there’s a reason we’ve got those right? I’m trying to not accidentally lose my retirement account on this!
POINTS OF INTEREST
This undated photo released by the New York Police Department shows a suspect in the fatal shooting of UnitedHealthcare CEO Brian Thompson on Dec. 4, in a taxi. Part of the image was blurred by the source. NYPD/NYT
THE ELUSIVE SHOOTER: As the search for UnitedHealthcare CEO Brian Thompson’s killer goes on, investigators are reckoning with a tantalizing dichotomy: They have troves of evidence, but the shooter remains an enigma. (AP via Boston Globe)
HAPPY HOUR: And so it begins: The high-stakes scramble from the Back Bay to East Boston for one of the biggest prizes City Hall can bestow: a liquor license. (Boston Globe)
STUCK TRUCKS: For years, officials in Vermont have been trying to figure out how to stop trucks and buses from getting stuck on Smugglers’ Notch. They think they’ve found the answer. (Boston Globe)
MEETING A NEED: The overturning of Roe v. Wade has meant a jump in outside donations for nonprofit abortion funds. (Maine Monitor)
CALLING ALL BOOMERS: It’s been 40 years since the band NRBQ played at The Rusty Nail in Sunderland on New Year’s Eve, and now the Academy of Music in Northampton will screen footage from that night. (Daily Hampshire Gazette)
SPACE CADETS: The world’s two richest men and biggest space entrepreneurs, Jeff Bezos and Elon Musk, both believe humanity’s survival depends on life beyond Earth — but for very different reasons. (Axios)
ANOTHER ICON BITES THE DUST: Nobel-winning author Alice Munro’s husband was a pedophile who targeted her daughter and other children. Why did she stay silent? (New York Times)
A NEW ALBUM?: As Taylor Swift’s record-breaking Eras tour wraps up in Vancouver, fans are convinced she’ll make some sort of big announcement. (CNN)
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GLITTER GALORE: Expect a starry field of actors when nominations for the 82nd Golden Globes are announced this morning. (AP via Boston Globe)
JAY-Z ACCUSED: One of the dozens of sexual misconduct lawsuits filed against Sean “Diddy” Combs has been amended to accuse Jay-Z of joining Combs in raping a 13-year-old girl in New York City in 2000. He says it’s blackmail. (New York Times)
THE TRANSITION TO TRUMP
Appointments
One of president-elect Donald Trump’s advisers on the transition is getting ready for a brawl over Defense nominee Pete Hegseth, threatening to dig up dirt on any potential Senate GOP holdouts – especially about drinking and womanizing (Politico) … Trump nominated his former ambassador to Mexico, Christopher Landau, to serve as deputy secretary of state (UPI).
Politics and policy
In his first network TV interview since the election, Trump told NBC News that he’ll pardon those convicted in the attack on the US Capitol, work to extend the tax cuts passed in his first term, and not seek to impose restrictions on abortion pills. He also said he hopes the Justice Department prosecutes his political enemies, that he will deport millions of undocumented immigrants and try to end birthright citizenship, but that he wants to find a legislative solution to keep Dreamers in the country legally. (NBC News)
Related: Jan. 6 defendants and their supporters are confident that Trump will fulfill his campaign promise of pardons. (Boston Globe)
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Andy Rosen can be reached at andrew.rosen@globe.com.