What happened
Cryptocurrencies are starting off the week (and the month) well -- and why wouldn't they be? According to one well-known source of cryptocurrency, November is #CryptoLiteracyMonth!
As of 11 a.m., here's how prices look for several of the biggest names in cryptocurrency:
- Bitcoin (BTC 4.94%) is up a modest 2.5% over the last 24 hours.
- Ethereum (ETH 3.03%) is up a bit more -- 3.5%.
- And Dogecoin (DOGE 4.78%) is powering ahead 5.3%.
Image source: Getty Images.
So what
Partly, traders' enthusiasm for cryptocurrencies this morning seem spurred by a surprise announcement from cryptocurrency cash exchange Coinme, declaring November to be Crypto Literacy Month (and attaching a hashtag to the term to boot, in hopes of making it trend).
As CoinDesk reports today (CoinDesk's parent company is an investor in Coinme, by the way), all month long, Coinme subsidiary CryptoLiteracy.org will be promoting "basic crypto knowledge ... to promote greater consumer education about crypto and bitcoin, the concepts behind them and the ways investors of all types can integrate digital assets into their financial planning," highlighting and publishing articles on a different facet of the crypto phenomenon each week.
Meanwhile, Bloomberg reports today that PayPal co-founder Peter Thiel is regretting not buying more cryptocurrency himself when the price was lower. Speaking at the National Conservatism Conference in Orlando, Florida, on Sunday, Thiel attributed the skyrocketing prices of cryptocurrencies of all stripes to investor fears that inflation is creating "a crisis moment" for the economy.
Now what
In Thiel's opinion, therefore, there is more than mere momentum trading going on here. Rather, investors are investing in cryptocurrencies on the theory that inflation will eat up the value of "real" money -- dollars, for example -- and that cryptocurrencies will be a better store of value.
If he's right about that, though, then logically, investors should avoid cryptocurrencies that can be produced in unlimited supply, and invest instead in Bitcoin, for which supply has been capped at 21 million coins -- after which, in theory at least, all Bitcoin in the world will have been mined and the value of what then exists can only go up. A coin such as Ethereum, for which the supply is unlimited but the amount of annual production is capped at 18 million ETH, would be second in terms of holding value, while a coin like Dogecoin with a much higher rate of production (5 billion coins per year) would be a correspondingly worse store of value and thus a less effective hedge against inflation.
