With the Federal Reserve set to begin raising rates in a few weeks I thought it time to dive back into a discussion of crypto now that the ‘easy money’ era post-COVID is over.
I know many still don’t believe the Fed can stop QE, no less shrink its balance sheet, and because of that the refrain, “You can’t taper a Ponzi,” can be heard from every corner of financial media.
I tend to agree with that sentiment because, of course, all Ponzi schemes require new money to constantly come in to prop up the asset values of of the previous round of funding. This is the definition of a Ponzi scheme, after all.
But in a world of Ponzis built on top of Ponzis built on top of Ponzis the idea that the biggest one, on which all the others are built, can’t save itself for a time by popping all of the daughter Ponzis is a bit disingenuous, if not outright obtuse.
And it’s not because debt-based currency regimes aren’t inherently Ponzi schemes. They are. It’s because once the pile of currency is created it has the ability to move where it is treated best and away from those assets most vulnerable to liquidation.
So, the situation in the real world, as it unfolds in real time, is far more complicated than just “You can’t taper a Ponzi.” In the long run, yes, that is correct. But in the time frames where people actually make decisions on where to put their money to provide them a return, it is absolutely not true.
And this is the hardest thing I’ve tried to teach my readers and my patrons over the years. It’s one thing to accurately state what the end state of a particular system will be. In the case of the U.S. dollar reserve system, total and complete collapse is inevitable.
It’s quite another to put a time on when that will occur and in what order will the system collapse.
This is the fundamental problem I personally had to overcome during the early years of my financial writing career. When publishing a newsletter where you lay out an investment thesis and give people your best ideas it simply isn’t good enough in 2013 to say, “in ten to fifteen years all of these losing picks in gold or oil will be winners because the dollar is doomed.”
My approach had to become better, more nuanced and, frankly, more in tune with the ebbs and flows of markets while still maintaining my Austro-libertarian analytic framework.
I remember a particularly difficult moment back in January 2015 when I finally admitted that no matter how much I hated the U.S. dollar with respect to a hard asset like gold, my opinion didn’t matter and the market was still king.
The Fed and the other central banks still had plenty of cache with investors and therefore still had plenty of ammunition in their monetary artillery. Yeah, all they were doing was kicking the can down the road to create a bigger problem tomorrow, but that didn’t mean there wasn’t money to be made from it today.
That was the moment I had to face becoming better at this or getting out of the game completely. It meant truly humbling myself before the market and realizing you aren’t a ‘unique snowflake’ or any other such nonsense. You are treading a path others have before and you will again.
It meant going all in on what I do now, marrying the global macro picture with the political and social trends and place them in a context of seemingly unlimited corruption capable of sustaining hundreds of Ponzi schemes around the world simply because everyone wanted to believe in them.
For years, I’ve had a running discussion with Dexter White over the liquidity of the cryptocurrency market. He consistently points out that liquidity in cryptocurrencies is mostly a function of the capital flow into and out of bitcoin (BTC).
Everything else is a derivative of that and, in effect, if you control the flow into bitcoin you control what Ponzi schemes are sustainable within that market. That argument, in my opinion, was far truer in 2017/18, however, than it is today.
Since the high in April of 2021, Bitcoin and cryptocurrencies have been in a weird place. Bitcoin is clearly grinding through a counter-trend bear market while the rotation out of it and into other areas of the crypto-space have seen spectacular booms and equally spectacular busts.
Following that liquidity sloshing through various projects has made a lot of people a lot of money and cost a lot of people as well.
First with the Fed tightening dollar liquidity starting last June and now with the Bank of England getting ahead of the Fed in raising rates in the face of crippling inflation, we’re now looking at a much different milieu than we were this time last year when everything crypto was coming up roses.
It was that massive bull market through the first half of 2021, however, that saw tremendous liquidity flow into all sorts of new projects, new ideas for generating yield to attract capital. Whether they are or were Ponzi schemes is irrelevant.
Looking at the current DAO-pocalypse occurring in rebasing projects like OlympusDAO and it’s hard not to come to that conclusion. You pay out 7000+% for any amount of time without any reason to stay in the token other than ‘number go up’ and you are worse than any emerging market subject to ‘hot money flows.’ You are literally a time bomb with a short fuse waiting to blow up in everyone’s face.
From $800 to $35 and back to around $60 in two months, I think qualifies as an explosion, especially for a project less than a year old.
There wasn’t any real doubt about that. Just paying a yield in order to attract capital with no intention of doing anything with that capital other than holding it is playing a game of chicken with investors, waiting for the first guy to cash out and starting the avalanche of selling.
It doesn’t matter if you’re the Bank of Turkey or some guy with a few servers and a Github repository.
What we’re seeing in crypto is a massive acceleration of the lifecycle of these types of projects. Olympus has already spawned a ton of imitators simply because at its peak it attracted nearly $2 billion in capital in just a few months.
I’d say why something like that happened is equal parts stupid greed, the insane amount of price appreciation in crypto fueling it and the honest desire to build something new.
Projects like that only exist because the current system of capital formation is even more corrupt and less equitable than some bit of code with only minimal controls over the money flow.
Unfortunately, this is the way innovation occurs; a lot of painful trial and error and a lot of crippling losses. But without this environment there is no way off the current hamster wheel of Central Bank-backed Ponzi schemes.
For crypto to ‘grow up’ it has to build upon bitcoin’s foundation in a sustainable way, one where the replacements for the current upper layers of Exter’s Pyramid are self-contained such that the capital that flows into bitcoin at the bottom is treated well enough it has no desire to leave and go back to the fiat one.
It is rare that a new technology comes out the gate perfect the first time. So, I don’t look at Olympus as a failure because it’s pointing innovators into new and interesting directions trying to solve the Ponzi math and create that ever elusive sustainability which only comes from turning capital into real world assets.
They do this because the goal is laudable, end the systemic thievery of debt-based fiat money. In the case of one new crypto project I’ve found, even reverse the time risk of traditional lending in such a way that it frees the entrepreneur from the vultures of Wall St.
Bitcoin maximalists believe bitcoin achieved this perfection, and they have yet to be proven wrong. But neither have they been proven right. Only time will tell as imitators come and go. And I’m happy to remain both bullish on that prospect and skeptical of it simultaneously.
That said, bitcoin alone isn’t enough to contain the entirety of human activity or desired outcomes. This is where we are today and why things like the spectacular booms and busts of the various DeFi platforms are necessary growing pains.
We humans always do this. We go through every bad idea and iterate on them until something sustainable comes out of it, if ever. Even projects that have had their fundamentals challenged, like Olympus, and are still learning from their mistakes, have a future to help us understand what can be done to avoid the trap of the Ponzi structure.
One of the valid knocks against crypto is what’s the point if we can’t utilize these tokens, these magic beans which throw off yield, to procure real things in the real world? After all, isn’t that all money really is?
A place to temporarily park your savings on the way to getting some thing in the future you want/need. As the old system teeters and cracks and the ones who broke it try to shuck and jive us to throw good money after bad while their Ponzis collapse, it is this critical moment in time where new ideas flourish, good and bad.
Someone will crack that code, to turn the promise of math into real world wealth more efficiently, in the same way that someone will always try to manipulate it so that they don’t have to work for their dinner.
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All your crypto crap depends on government sponsored telecommunications systems to function. Without that, its a network of one. No one is able to validate any transactions.
The cost of that telecom network is that you will pay taxes on your crypto crap — at least as much as you are paying on fiat crap. If you disagree, you get free accommodations at club Fed (aka prison). Your crypto might be safe over in Italy, but you are imprisoned in a super max.
Bankrupt G7 governments are not going to let you use their telecom system for free, and its really naive to think Verizon or AT&T will (or can) put customers over uncle sam. BT and DeutcheTelecom are even more captive.
Crypto is the new tulip bulb. Get over it.
Stack USD in your bank account and hodl it. USD holds its value over time and will always and forever be the world reserve currency.
Also, newsflash: Tulip mania lasted three weeks. You no-coiners need a new metaphor. BTC has been going strong for 12 years, gathering momentum the whole time, and is now being adopted by entire countries. It’s also still early.
But you just nevermind the tulips and stack USD. And bonds. I hear USD bonds are paying a whopping 0.75%! You’ll build wealth in no time at those rates! Bestest currency evar!!
@penguin — you did not even attempt to address bitcoin’s dependence on government telecom systems, because you can’t. Its a fatal flaw that makes bitcrap and fiatcrap two sides of the same coin.
A currency system dependent on the US government for its existence is not superior to a system dependent on the US government. Either way, Uncle Sam will get his cut and his cut will continue to get bigger over time for both bit-crap and fiat-crap.
For several years back in the 50s, storing money in casino credits was the crypto of the day. It “worked” for a short while (the IRS didn’t enforce it). But once the idea took off the IRS showed up requiring all manner of reporting by the casinos and taxes from gamblers / money launderers. Casino chips and USD are the same thing.
The IRS just started clamping down on crypto in earnest this year. The FCC just started clamping down on celebrities hawking tulips, umm I mean crypto, this year. Uncle Sam will get his cut or crypto pushers will go to jail.
You will be forced to pay your taxes (at minimum) in USD. That means you will need to sell some crypto for USD at least once a year to pay. When you do, you will create an audit trail for the IRS (and all your creditors, but especially the IRS). Al Capone thought he had the system beat also — he was both smarter and more ruthless than you.
Since you cannot refute the critical telecom flaw in crypto, you fell back on a straw man argument, falsely claiming that USD or bitcoin are the two and only two options to store wealth.
Just because you “prove” that USD is flawed, that does not mean crypto is the only alternative. High (not necessarily hyper) inflation is pretty common around the world — and people found ways to save before crypto
Lolz. Some people just can’t accept it.
Fiat is collapsing. BTC is the soundest money ever created. It’s time has come.
@ James Bond
I didn’t address its dependence on “government telecoms” because it isn’t dependent on “government telecoms”
The internet is not government owned, nor is the infrastructure that facilitates it. The only strawman here is the one of your own making. Bitcoin miners in many cases provide their own energy. Truly decentralized exchanges (neither regulated nor regulatable) exist and are growing in both number and usage. And its growing adoption by independent countries as a legal currency means its not going away – ever.
There are nuances to your argument about taxes, more than I have time to get into. But it’s not so cut and dry as you suppose, particularly given its growing status as legal tender.
Finally, there are countries other than the US. Bitcoin exists in all of them.
You really do need a new metaphor.
Crypto is supposed to be anonymous. If it isn’t, what good is it really?
And as we are learning, crypto really isn’t anonymous. Little tidbits of information keep leaking out that should lead you to understand that the government can track it, And if they can track it they WILL track it. That is a guarantee.
Once that becomes common knowledge and the government regulates crypto, because you know crime…. then crypto will be just another dirty shirt.
Like Tom, I think there are opportunities to make money in crypto, but it isn’t a store of value. It’s a notation on a spreadsheet. When the fiat bubble finally collapses and a new financial system rises up to replace it, do you believe that people across the globe will continue to value Bitcoin or DogeCoin or whatever other ledger notation is de rigueur? I don’t.
I’d bet on something else.
there are plenty of anonymous coins out there … and with taproot, privacy is now real for bitcoin in a way that it wasn’t before.
Peter Schiff just made a good point.
HODLers used to point out that gold was once confiscated, but private crypto couldn’t even be outlawed.
Schiff points out that actually ownership of gold was merely outlawed, whereas the Bitfinex case is showing that private crypto can even be confiscated.
“Also, newsflash: Tulip mania lasted three weeks. You no-coiners need a new metaphor. BTC has been going strong for 12 years, gathering momentum the whole time, and is now being adopted by entire countries. It’s also still early.”
Tulips pre-date the mania and they are still around today almost 400 years later. But nobody values them as investments or stores of value. They are just flowers.
It is a serious logical fallacy to claim that the USD is definitely going to collapse — and therefor crypto has to prevail afterwards. You cannot infer the second from the first.
At no point did I claim that the US government “owned” the telecoms… that was @darkpenguin trying to set up another straw man because he can’t think straight. The telecoms are privately capitalized but 100% under the thumb of the government. Anything the US government wants, ATT and Verizon (and every cable company too) will grant — with or without a warrant.
In every country, the host government has defacto control over communications systems. Even in so-called democracies.
If any of you crypto cult members bother to look, you require a private key to access your crypto. You have that on your person, ergo it can be seized. You must access your key to retrieve your crypto — to pay taxes or to pay a legal judgement or to bribe someone to take you out of the country. Whatever the reason, your private key won’t stay private if you ever access your crypto.
And you can always be arrested and detained indefinitely or until you turn over your key. People highly trained to resist interrogation crack; its just a matter of time. Most crypto weenies are not trained to resist, so you will crack very fast.
Of course, the privacy argument that Tom Luongo makes depends on the assumption that crypto doesn’t have a flaw built into it (as DES and AES both have). It assumes that more complex supercomputers can’t decrypt 512 bit keys in a matter of days…. which is a dubious assumption. You folks are hardly the first people in history to claim your encryption algorithm is uncrackable. There is every likelihood that the hash algo behind crypto has already been hacked.
The point of crypto is that hundreds of people have a copy of the ledger. So when (not if) the algo is cracked — the whole thing implodes.
You are cult members. You attack me (the messenger) when I question the teachings of your cult leader. You have lost the ability to think critically.
I thought Tom was smarter than that. Apparently I was wrong
James,
That’s a lot of projection in one piece. I’ve addressed all those concerns and in no way have I stated that if the dollar collapses bitcoin must rise to replace it.
That is one of my preferred scenarios and one which I give a non-zero probability to which is rising daily with the way things are working out.
The encryption is backdoor’d angle is old and tired. It’s fantasy. If they had that power they would have used it already. Crypto is now too big with too many players behind it for real for that to be the case.
But, please, be my guest and TL;DR yourself into continuing to believe fantasy.
Also, it is the height of solipsism and narcissism to walk into a room this big and declare yourself the ‘bringer of truth.’
There are these things called mirrors, you should try looking into one.
Are your concerns possible? yes. That does not, however, make them probable. And because of that it is the height of logical fallacy to then extend ‘cult like’ status to those that disagree with you by conflating the possible with the probable and calling it a certainty all while claiming the mantle of ‘the only person who can think critically.’
That’s some seriously arrogant bullshit right there… You and Ivor should get together and try and out ego each other.
Tom, I was being attacked by this darkpenguin loser and you chose to get involved.
The British government admitted 40 years after the end of WW2 that they had cracked Germany’s enigma code during the war. The Brits didn’t admit this for decades because later ciphers were based on the same flawed setup.
Ten years later (50yrs after WW2), the US admitted they had cracked Japanese diplomatic ciphers two years before Pearl Harbor. They kept this a secret for 50 years because other ciphers relied on the same setup.
You and your crypto cult are small fry. If you ever get enough to matter, you will be arrested and your crypto account quietly drained (even if you don’t give the key). Officially, no one will know what happened to your crypto and you will be in jail.
Meanwhile, a very similar cipher is used for blockchain — managing inventories and international trade between massive corporations. That is of interest to large states. They are not going to expose their ability to crack international trade blockchains just to go after a tin foil hat cult.
Like your friend darkpenguin, you don’t have an answer to fiat issuers having control over the telecom systems that your crypto crap depends on to function. As soon as you post a transaction to the chain, you are no longer anonymous. You might be too small a fish to go after right away.
Dood you called me out directly. I was responding to that directly. You may want to think about that next time.
Tom, you got involved when you wrote:
” February 4, 2022 at 10:17 pm
there are plenty of anonymous coins out there … and with taproot, privacy is now real for bitcoin in a way that it wasn’t before. ”
Before that, it was darkPenguin making a fool of himself. You could have stayed out of it. You chose to get in the middle.
I’ve thought about subscribing to your work, but each time I almost do you write stuff like this. Some good writing mixed in with tin-foil crap makes a lot of unnecessary work for readers. No one wants to pay to do work for someone else.
Your crypto is “safe” only because you are not a big enough fish for the government to bother going after.
“Dood” you have convinced me of the value of commenting here. Thanks
@JamesBond
USD is collapsing *right now*. One would have to be seriously deluded to not recognize the painfully obvious implications of a $30 trillion (admitted) debt burden and a dollar that has already lost >98% of its value. The only reason it hasn’t gone Weimar is because it’s the world reserve fiat, yet even so it is still experiencing a very high rate of inflation, certainly much higher than the “headline” inflation rate they are reluctantly willing to admit. And its been that way for years, accelerating apace since the 2008 crash. As I have already implied, world reserve currency status doesn’t last forever – just ask the Dutch, or the Portuguese, or the Brits.
Again, the world is bigger than the US, which you seem utterly incapable of comprehending. So while the US may attempt to exercise control over the communications network to interfere with the use of Bitcoin in their own backyard, you’ll probably find them entirely incapable of doing anything to stop it on a global scale. In fact you’d probably find they aren’t even really capable of doing anything to stop it on a national scale either. Would such an attempt affect the value and/or adoption rate of people using Bitcoin? Sure, at least temporarily. However as I have already said, Bitcoin is in the process of being adopted by entire nations as legal tender, which means it isn’t going anywhere.
You’d also be a fool not to consider that decentralization of the internet itself isn’t on the horizon. Decentralization is the future.
It’s laughable to listen to you call anyone here a “cultist’ while you gleefully fantasize about the government arresting and detaining people indefinitely to deprive them of their assets. Marxism is the biggest cult there is, and you sir just outed yourself as one.
But I won’t waste any more of my time. You clearly have what can only be described as a hysterical aversion to the concept of Bitcoin, not to mention a somewhat rudimentary understanding of it, and I’m not here to try to convince you to buy it. Quite the opposite, in fact. I’d be happier if you sunk all your fiat into US dollar bonds. Nobody else is buying them and they need your support.
I come here for commentary like that offered by JamesBond and Ivor. Thanks to those of you who challenge the cult and its leader!
I work for a major bank in the payments world which has a name like JP Borg-an. a I can tell you without a doubt that the amount of people, infrastructure, etc it takes to run ISO credit card rails, ACH, ISO 20022 payment systems across the world is so far in excess of the energy and capital required to run BTC mining that it hardly compares.
Remember the original Bitcoin Whitepaper was about 4 pages long. Think about that. If you read that whitepaper and it does not click with regard to how truly revolutionary this is then I don’t know what to say.
Also crypto is as resilient as TCP/IP with regard to the active network and that was designed to function and route traffic after major cities and infrastructure had been destroyed in a nuclear war.
I own gold, real estate and crypto. You should at least be aware of the advantages and risks around crypto.
Agreed completely. Thanks for this
Good thought-provoking article, especially for a Fed skeptic like myself! I enjoy learning about your journey, as I progress through my own.
Tom, that was very well stated. Bitcoin and all of the rest offer “learning experiences” which tend to be rather painful (but also useful). That having been said, anyone who understands the lessons of the history of fiat, also knows how this rigged game will end. But as you said, that doesn’t mean there isn’t money to be made. Just so long as one keeps an eye on the exit, and has an escape route planned.
Thoughts?
https://www.coindesk.com/business/2022/02/02/silvergates-acquisition-of-diems-assets-positive-for-stablecoin-launch-analysts-say/
Yup.
The Davosians paid Zuckerberg to launder their IP, and now he’s handing the product over to his customer via an intermediary.
Will be interesting to see how the IP and tech migrates back to the Davosians from here (FDI? M&A?), and how quickly they position Diem for “emergency” UBI once their CyberTonkin brings the global economy down.
My guess is quite soon now – Ukraine is comfortably providing their scapegoat Putin with the casus belli they will point to as the trigger for “his cyberattack”
P.S – The US and UK have started using the phrase “false flag” to describe what Putin is about to do, which tells me their CyberTonkin is very close. Using that term publicly for the first time is telling the world that false flags are real, and they won’t want the viewers pondering that for very long.
Of course this is their usual playbook – accusing others of that which they have done, or are about to do.
Pretty sure Meta sold Diem. Expensive failure, I’d say.
https://www.techspot.com/news/93251-facebook-libra-crypto-project-now-called-diem-has.html
@Ivordeacon… looks like you were correct about Diem…juicy…
https://www.politico.com/newsletters/morning-money/2022/02/10/the-stablecoin-that-launched-a-thousand-regs-00007636
Tom, your takes on finance and world events are synthesized in a truly unique way which is why I keep coming back. I’d like you to be aware of, in my opinion, the most important next step in crypto. The major problem that needs to be solved in crypto right now is the “oracle problem”. In order to have basic financial products like lending and borrowing, you need to know the prices of tokens on-chain to determine collateral ratios and liquidation. This leads to depending on a single API that can fail or be manipulated, which happened to multiple protocols (see Compound and Maker hacks). A protocol called Chainlink (seemingly) solves the oracle problem through some interesting game theory and token incentives. I’m not suggesting you buy it or even talk about it, I just want you to understand it because the ideas are as interesting as BTC first was.
To many fans of the free market what first attracted us to Bitcoin was the idea of a global decentralized property rights and TRUTH that could not be manipulated by a single bank or government. However BTC is not complex enough to host financial services such as lending on-chain, which makes us depend on centralized services once again (most people trade BTC on what? Robinhood, Coinbase, etc.) The protocol that enables people to keep their wealth and transfer their wealth between different assets, entirely on-chain, is the one that will change the world the most. Chainlink is aiming to be this protocol. I would seriously recommend watching this youtube video from the founder if you have the time: https://www.youtube.com/watch?v=YShbzR7mlog
That’s a good piece – the idea that the fiat infrastructure will fall apart at varying speed is obviously more true than the simplistic idea that it would all collapse at once.
But Tom you’re surely taking apart a strawman. The actual contention is not whether fiat will slowly or quickly collapse, perhaps giving time for capital to slosh into safer and safer corners, but that a controlled demolition will be used. Central bankers don’t want the blame for what’s coming.
The Davosians have openly admitted that their Great Reset requires digital identification and UBI (both of which COVID has given them), and public crypto (Diem or something else on its way as we speak), and then they just need a spark with which to bring down the system (with a CyberTonkin, which they wargamed last year and will blame on a scapegoat like Putin with a fake casus belli like Ukraine) so we beg for their help.
They won’t get the blame for the disaster they engineered (indeed will be seen as heroes by the recipients of the “emergency” UBI) and they get to own everything. Which demonic narcissists always think will make them happy.
I realize you’ve heard it all before and think it all very unlikely. I hope you’re right, or we will all have to learn how to be Edgar Friendly.
P.S – I also realize that you know there is a big difference between money and currency, but private crypto is neither and never will be. They will outlaw it soon, and leave it lying in the dust. If the cryptopaths are lucky, their reward for having helped popularize crypto will be to keep most of their gains, as the Davosians stampede them into Diem with some kind of amnesty charade.
Tom are you seeing Lagarde talking about the “Markets in Crypto Assets Directive”?
“It’s so critically important that MiCA is pushed through as quickly as possible so we have a regulatory framework within which crypto assets can actually be caught.”
At the exact moment Biden is about to sign an Executive Order for private crypto regulation.
Has the end come for private crypto?
P.S – I note that Diem has been laundered into the hands of Silvergate, who could issue the stablecoin under a regulatory framework using their status as a bank, in a way that Facebook could not.
Ivor, Lagarde is going to be President of a smoking hole in about a week where the ECB’s balance sheet used to be. Her pronouncements proclaim her idiocy and desperation.
You think no such legislation is brewing, or if launched it will fail to stick?
As reported at Coindesk today……
“European Union lawmakers voted today in favor of controversial measures to outlaw anonymous crypto transactions…….payers and recipients of even the smallest crypto transactions would need to be identified, including for transactions with unhosted or self-hosted wallets.
Further measures under discussion could see unregulated crypto exchanges cut off from the conventional financial system.”
What are you saying Tom, that definitions evolve and are not static? That where once we defined a car as something with 4 wheels that runs on the ground through mechanical propulsion, we now have to adjust that definition because cars can fly? So the same thing with money – technology has forced the defintion forward, out of its historical comfort zone? I guess all truths, e.g. in economics, religion, philosophy, science, exist on the drawing board, in the seminary, but then someone has to go up the Eiffel tower and put some wings on and put it to the test. Likewise money maybe – it’s going through a creative phase of developnment?
You don’t dont account for the Lightning network where you can send cents for almost nothing settled on the Bitcoin network.
And that already bitcoin settled more money in 2021 than VISA and with a lower cost. (fees)
Why do I always feel like I’m watching a bunch of teenagers arguing while standing on a railroad tressel, when people discuss Bitcoin. There is a freight train coming. Horrible demographics in a house-of-cards, growth dependant, economy with DARPA dancing robots, face recognition, and the mass surrender of privacy to the internet, guarantees continued growth of government. As a libertarian spirit but with no illusions, it is easy for me to see that governments are never going to give up the control of money. Democracy clearly gives us socialism. People want somebody to fix things. They may talk a good libertarian game but they vote like totalitarians. The government with the help of the media will demonize cryptos and people will clamor for protection which will be the end of it. The greedy ponzi half (I think more than half) will bale in a heartbeat, bringing down the house. Yes there will be true-believers that will hold worthless BTC awaiting the coming of the crypto Lord until they die. Yes, a very few inside people will make a bundle. But with the gargantuan problems that face humanity, no government with any muscle is going to allow the freedom that BTC purports to give. Every warm blooded animal on the face of the earth lives under some kind of government starting with their mothers. Humans have never ever lived without government. Governments exist as force and money finances force through bribes or thuggery. So unless you believe you are smart enough to time the fall and will be allowed to get away with it, you are being played.
Nobody said that there will be no government. Bitcoin is just an open monetary network that’s more efficient, less prone to human error and the economic actors that use it will be in advantage compared to those who don’t.
Govnment is will bend the knee to economic interests.
Looks like the Fed has two crypto initiatives in play: Project Hamilton and a study to evaluate the feasibility…. https://finance.yahoo.com/news/boston-fed-mit-sketch-out-theoretical-fed-crypto-coin-224631196.html?.tsrc=372
All crypto = fake, fraud, scam.
RE: BitFinEX hack…
Smart people. Well educated and quick. But it just took one flaw to take them down…the Cloud…
……But it was Lichtenstein’s use of a cloud-storage account that led to the unraveling of the alleged plot. The government decrypted a file there that contained a list of 2,000 virtual currency addresses, along with corresponding private keys. Almost all of those addresses were linked to the Bitfinex heist, according to the Justice Department, which said the crypto also passed through entities owned by Morgan. ….
https://www.forbes.com/sites/jonathanponciano/2022/02/08/feds-seize-36-billion-in-stolen-bitcoin-arrest-couple-five-years-after-massive-crypto-exchange-hack/?sh=468e4cab7c95
Unfortunately the article did not say how the feds “stumbled” on the cloud file. That is the REAL story. There is more here than meets the eye.
A lot more than meets the eye.
The US now holds a significant amount of btc.
Seizure is actually a great way for them to finally hold some officially (assuming they don’t give it back to the original owners) without having to announce that they’re going to purchase a large amount (and thereby paying more for it as the price would no doubt increase immediately).
At least that is a theory being floated around Bitcoin Twitter…
Virtual asset seizure….new FBI unit….
https://finance.yahoo.com/news/fbi-form-digital-currency-unit-161840333.html
Its not easy to invest in crypto without having proper knowledge and understanding about the market. If anyone invest in crypto without thinking they might loose there money for sure.