What Bloomberg’s Crypto Opus Means for the Next Bull Market

This week’s Oct. 31 print edition of Bloomberg Business Week will contain just one story, a 40,000-word piece by columnist Matt Levine titled, with justified hubris, “The Crypto Story.” Its apparent aim is to be a one-stop introduction to everything from the basic principles and technology of cryptocurrency to its most fascinating social manifestations.

The significance of this may be unclear to those not actually in the journalism business. But it’s a major landmark, perhaps even the final inflection point between a decade of mainstream skepticism and a future in which cryptocurrency’s importance is taken for granted.

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There are three main reasons this single story matters, and maybe matters a lot. First, because Bloomberg is arguably the most influential and respected mainstream business news outlet on the planet right now. The Wall Street Journal certainly still has its role, but it can’t match the breadth and depth of Bloomberg’s organization and output.

Second, because Matt Levine is arguably the most respected financial writer of the moment, at Bloomberg or anywhere else. Levine was an investment banker at Goldman Sachs and an M&A lawyer before joining Bloomberg as a columnist in 2013, so he brings mainstream, blue chip expertise to the role.

But just as importantly, he’s a very accessible writer who fully understands how arcane finance is to the average Jane, and he writes with a lot of self-awareness about how little sense the entire topic sometimes seems to make.

That embrace of absurdity has served Levine as a sort of back door to intellectual openness, a freewheeling “isn’t this crazy” approach that has endeared him to both readers and fellow finance writers. His influence among my ilk is hard to overstate: Matt Levine is up there with “The Big Short” author Michael Lewis in the pantheon of writers proving Finance Isn’t Boring.

The third reason Levine’s big crypto story is so important is because it’s … big, 40,000 words, the rough equivalent of a 160-page book (and you can bet Levine will turn this into an actual book).

Bloomberg has only devoted an issue to a similarly epic work once before. It represents a lot of resources devoted to a topic that a few intellectual laggards still regard as nothing more than a sideshow.

Importance is ... important

O.K., so this new crypto story is by the most important financial writer of the day, writing in probably the most important financial publication, at a length that indicates serious commitment. But what does the story actually say?

Perhaps the most emblematic bit of the piece is an image caption early on which reads simply: “Bitcoin is a Big Thing.” The content as a whole offers the same takeaway as the fact of its publication: that crypto Really Matters – for better or for worse.

Levine brings his usual mix of curiosity and humility to the project, and devotes a lot of space to simply explaining, in approachable normie terms, stuff that crypto professionals take for granted (though I always recommend a refresher).

For instance, Levine writes, “In a sense, the technological accomplishment of Bitcoin is that it invented a decentralized way to create scarcity on computers.” That’s a decade-old insight for many of you reading this.

But having Matt Levine explain that thesis, in detail and with an entirely straight face, will have an entirely new wave of finance professionals taking it seriously. Some portion of those serious types will walk away with a newly formed bull case, particularly around Bitcoin and Ethereum.

That is not to say that Levine affirms any particular argument for why crypto matters, or lays out a clear agenda for what it can accomplish, or even says outright that he believes any of this will last indefinitely. (At the time of writing, Levine said he owned about $100 worth of crypto.)

What Levine does say is something both more moderate and more important: Crypto is interesting.

“I don’t have strong feelings either way about the value of crypto,” Levine makes clear. “I like finance. I think it’s interesting. And if you like finance – if you like understanding the structures that people build to organize economic reality – crypto is amazing.”

I don’t think it’s a wild exaggeration to say that those four sentences are pretty much Game Over for a certain breed of hard-line cryptocurrency skeptic. There is no room left in the discourse for blanket denial of crypto’s importance as a technological, financial and social happening.

That’s aside from the fact that Levine is neutral on crypto’s actual value. By his lights, things could either go in the direction of greater openness and freedom that bitcoiners often tout, or towards a global hellscape of unregulated scams and unending speculative instability.

If either of those is possible, it seems inarguable that people serious about finance, and in turn about society, need to be paying attention.

When the smartest guy in the room is trying to sell you something, he’s a) motivated to convince you and b) never actually the smartest guy in the room, trust me. But when the smartest guy in the room finds something fascinating, without having a simple verdict, that’s when you pay attention.