Economist Nouriel Roubini, also known as Dr. Doom for his overly pessimistic view of economic outcomes, set his sights on cryptocurrencies yesterday. Consider 90% of them fraudulent.
Given everything going on in the cryptocurrency world, from exchange crashes to mass fraud, it’s easy to accept that notion. It lacks what it appreciates: tangible. Simply put, we have nothing in our hands. I prefer cash. I like gold. We can hold it and put it in our vaults and purses, but the more it is, the bigger and heavier the pile. .
But crypto doesn’t work that way. It’s just a number on the screen. Yes, today, as we move closer to a cashless society, traditional currency has become just numbers on screens, even moving around with apps and charge cards, but when you walk into a bank, you can put all that money in a nice big heavy weight. If you can give us piles of cash, our caveman brains will be happy.
So is he right? All this is just a mere Is it a big Ponzi scheme?
Are there really whales? Will a giant investor suddenly show up, pump huge amounts of money into cryptocurrencies, and then disappear from sight again? Raise us and add value to his holdings, but leave the rest of us empty-handed?
One thing Roubini is certainly right about is that there are definitely people using cryptocurrencies as a way to steal other people’s money. But that applies to all money since it has become an established concept in society. The truth today is that we live in a much more connected society where news spreads quickly and stories of deception and cheating are “exciting” to read. I hear about The media needs their readers, so they push stories like that for us to come back. It gives us the impression that it is a pool.
The information that emerges about the FTX exchange and its demise only adds fuel to this fire. , is likely enough to make you rethink where you invest your money. And yes, the few people at the top of the FTX empire were almost certainly not acting with the care and consideration that investors would have wanted.
If you look at Coinmarketcap.com today, January 19th, you’ll see that the global market capitalization of cryptocurrencies is $963.5 billion. This is a huge number by anyone’s standards, larger than the GDP of Turkey, the Netherlands, Saudi Arabia and Switzerland. And it has produced countless millionaires in that era. Their cars, homes and lifestyles are real and tangible. I’m sure they were in the right place at the right time, but that’s the case with all investments.
A better way to frame Roubini’s comments would be to apply to investors in all assets – warn buyers – or ask buyers to be careful. During Bitcoin’s meteoric rise, it looked like his 19th-century gold rush. The message sent was to invest everything you can because we will all get rich. I’m back. Whether or not Bitcoin’s $20,000 mark is normal now remains to be seen, but what we can say is that the investment is for the long term. If so, you’ve had a roller coaster ride in your life, but your investment is worth more than it was then. If you had invested in the US30, an index of the top 30 US companies, you would have enjoyed similar results in 2009, but your investment is worth far more than it did then.
There are always negative people, especially with new concepts. Because it is human nature. The Internet was branded as an early fad, along with CDs, cars, and even washing machines. What is true for all aspects of life is also true for cryptocurrencies. Please use common sense. If something seems to be true, it is always true. Invest wisely, carefully, and with a full understanding of what you’re doing.