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Opinion
Jim Bianco

Why the Bitcoin Crash Was a Big Win for Cryptocurrencies

Under extreme stress, the decentralized finance system worked as designed.  

Decentralized finance is winning. 

Decentralized finance is winning. 

Photographer: Jack Taylor/Getty Images

The cryptocurrency market means different things to different people. To many, it represents an object of naked speculation, which consumes almost all the media coverage about the space. For these people, Wednesday was a bad day, with the Bloomberg Galaxy Crypto Index plunging 19.2% in its worst slide in more than a year.

But to others, the crypto space is more than speculative instruments. It is the construction of a new financial system. For them, Wednesday was a huge win that might go down as one of the best days in crypto history. Under extreme stress, the system worked as designed. Yes, problems were uncovered, such as high fees to trade at the most volatile moments. But this is a known problem because the crypto platforms are running at 100% capacity. Solutions to add more capacity and efficiency have been in the works for months and should be operational by year-end.