IMF Issues New Crypto Asset Warning

The International Monetary Fund (IMF) sent out a warning, telling us that using crypto assets as national currency would be “a step too far.” Personally, I think a step too far is the existence of an unaccountable, global body that imposes an unsustainable monetary system on the entire word, but that’s just me. Leaving that aside, let’s look at the IMF’s arguments and see if they hold any weight.

Don’t Fear Short-Term Volatility

The IMF begins by warning us that crypto assets are extremely volatile, as if we didn’t know that. The IMF said that bitcoin, “reached a peak of $65,000 in April, but then crashed to less than half that value just two months later.” So yes, it’s volatile.

But here’s the piece the IMF is missing. If you’re measuring your investments in weeks and months, you’re going to lose every single time. You need to zoom out and look at it over the long run.

Above is the price of bitcoin in yearly candles since 2009. We can see that it has continued to go up and up, with only a couple of down years. This is a very different picture than what the IMF tells you. Even considering bitcoin’s recent downturn, it’s still up about 300 percent in the last 12 months. Taking the longer view is key. The IMF is trying to scare you by looking only at short-term volatility.