Since the sanctions war between Russia and America began, cryptocurrencies seem to have reached the end of their bearish cycle and are beginning to show the first signs of recovery.
Among the many narratives that are always published in the media to explain rises that are sometimes perhaps just random coincidences, there is the one that cryptos are sought after because they could provide anonymity in a scenario where banks, governments or institutions of various kinds start persecuting anyone with money anywhere.
But if we look at the behaviour of the Russians in this crisis, it is clear that crypto is not being used as an anti-sanctions tool at all.
On the contrary, the central element of any Russian anti-sanctions strategy seems to be gold.
The Russian central bank's stock of physical gold, measured as a percentage of its economy, is the largest in the world.
Moreover, about 2,300 tons of these reserves, worth about $150 billion, are stored in Russia and therefore cannot be frozen or seized.
To try to render these domestic reserves useless, Washington could impose sanctions on anyone who helps Russia transport or trade in physical gold. But this would be an ineffective measure.
Here is a list of the first things that come to mind to get around these sanctions:
If Russia puts 100 tons of gold on a plane to Beijing in exchange for manufactured goods, it will certainly not issue a press release to warn us.
The gold can easily be melted down and finished into new bars with Chinese markings, thus making it lose its traceability.
The Russian Central Bank can buy gold from Chinese mines in exchange for rubles to compensate for the quantities used to buy goods and materials. All without this gold being traceable in any way.
Russia and China both have numerous gold refineries and can therefore trade even without actually mobilising the bars, just using letters of credit.
Last but not least, we must remember the new precious metals marketplace that is trying to oust the London market: I am talking about the Dubai Multi Commodities Centre of the now legendary Ahmed Bin Sulayem.
As it happens, the Emirates have just recently become a safe haven for Russian millionaires in search of banks and consultants to help them form the trusts needed to protect their properties against sanctions. Wouldn't the unscrupulous Dubai marketplace (which months ago accused London of corruption and market manipulation) do its bit to facilitate gold transactions to and from Russia?
Compared to these concrete practical possibilities provided by the yellow metal, the legendary 'confidentiality' of cryptocurrencies pales.
When they say cryptocurrencies are not traceable, ask yourself why Russia is not using them to circumvent sanctions.
Mind you, 'technically' crypto could be used to make anonymous transactions. But in the world we live in and in this specific historical era, there are huge sociological, cultural and historical obstacles to the mass anonymous use of crypto.
To think that people in this first two decades of the 21st century would be able to use bitcoin confidentially and anonymously is like expecting Neanderthal man to be able to use a Renaissance war machine. It is simply a historical anachronism.
If there is a reason why cryptos might be on the eve of a new bull market, it is therefore not their potential to be used as an anonymous asset, but on the contrary, it is the increasingly real possibility that they will be integrated into the digital dollar system.
So it is not their 'dark side' that entices investors, but their complacent and submissive side to the US system.
The US financial elites and those of their allies seem ever closer to agreeing to legalise the instrumental use of crypto as a store of value to support their shaky fiat currencies.
For the revolution, however, we still have to wait....
Photo by Etienne Boulanger | released free to use
