Glen Goodman is the author of The Crypto Trader, and, as you might expect, he is an expert in cryptocurrency and what it means to the world at large, and individuals who might be interested in using is and investing in it. Once a business correspondent for the BBC and ITV, now Glen Goodman is the one giving the interviews, and he is a fascinating character to listen to and learn from, once famously turning a £3,000 trade into £100,000 by betting that would be a crash in 2008. Plus, Glen is a cryptocurrency contributing expert for the London School of Economics – that’s not bad at all!
Glen Goodman is sure that cryptocurrency is here to stay because, simply put, he’s an expert in it. He understands the technology behind it all, and that means he can be sure – as sure as anyone can be when it comes to trading, that is – that this isn’t a fad. This doesn’t mean, of course, that Glen is confident about the future of any particular cryptocurrency, just that cryptocurrency, in general, is not going to disappear. Bitcoin might have been the first, the original cryptocurrency, but there are plenty of others that were created afterwards, and bitcoin might be the most famous but it’s not necessarily the best.
It is, says Glen Goodman, entirely possible that bitcoin will be superseded in due course. There are many clever people working on many different projects around cryptocurrency (many of which don’t even have anything to do with currency at all). The problem with bitcoin is that it has trouble scaling; when a lot of people are using it and it gets over a certain level, the network slows and transactions become expensive. There are bolt on solutions that are being worked on, and these will help to make things better, but they aren’t integral to the way bitcoin works. It’s not ideal. Lots of other, newer cryptocurrencies were invented to solve these problems, and therefore they don’t need the add-ons and come ready to go.
The reason that bitcoin might be the one that succeeds is not that it’s the best technically – it’s not – it’s just the one that everyone has heard of, so it has a great head start. And it’s just too early, even for an expert like Glen Goodman, to say which, if any, cryptocurrency will take bitcoin’s crown.
With central banks printing a lot more money to help the world’s economies, this is putting upward pressure on bitcoin’s price because bitcoin is a hard currency – it is finite – whereas the dollar, the pound, the euro and so on, are soft; more can be printed when needed. And that’s what they are doing. This puts downward pressure on the real value of these currencies – there is over supply. How does this relate to cryptocurrency? Because this over supply of currency is a bad thing in many people’s eyes, reducing how much their assets are actually worth, they are turning to hard currencies like gold which is considered very stable, and bitcoin – only 21 million bitcoin will ever be created, and around 18 million are already in existence.
Glen Goodman thinks there might well still be some meteoric rises for bitcoin, such as we saw in 2017. He certainly doesn’t rule out the idea that bitcoin might be worth $1 million a coin, although he acknowledges that it sounds crazy – currently it is worth around $9,000 a coin. Yet considering its historic record, it just can’t be ruled out.
There has been some panic selling thanks to COVID-19, and even bitcoin seemed to take something of a hit, which was interesting for Glen Goodman. Some people were saying that if the market crashed (as it did in March 2020), everyone will run from stocks into bitcoin. Glen knew that wouldn’t be the case; in a market panic, people sell everything, they don’t move from one thing to another. And that’s what happened. As the stocks fell, bitcoin fell, and as the stocks recovered, so did bitcoin. They correlated. However, things are changing and by the beginning of May bitcoin was pulling away from the stock market, rising much faster.
Glen Goodman is sure that, if cryptocurrency were deemed enough of a threat, governments would do something about it. They might not be able to ban it outright due to it being decentralised, but they would do everything they could to hamper its development. They could make it very difficult, for example, to transfer bitcoin into dollars or pounds, for example. It’s especially difficult when it comes to the dollar already – this being one of the biggest currencies in the world, something that many people trade in. They don’t want to give that up, so there are thousands of different regulations that cryptocurrencies need to adhere to in order to be used.
Are cryptocurrencies the answer to shielding people from hyperinflation? Glen Goodman thinks so, although he’s not a great believer in the idea of hyperinflation. There could be significant inflation, 10 or 20 percent, which is still huge, but not hyperinflation as we saw in Zimbabwe. That tends to only happen when an entire society is collapsing rather than just a currency. But if it did happen, any currency that can’t be made endlessly is a good place to go.
The biggest mistake that most people make when they first come to buying and trading cryptocurrency is ‘HODL-ing’. It stands for ‘holding on for dear life’, and this idea has almost become a kind of religion! People do it all the time, even holding on to their bitcoin when the prize was falling by 90 percent. But they didn’t seem to mind; they had it in their heads they were ‘hodlers’ and it didn’t really matter. Only they were losing everything, especially if they had bought at the top of the market. It’s frustrating and it’s silly – you’re meant to make money in trading, and Glen Goodman does because he doesn’t hodl.