Crypto Sky is Falling

Famous investor and television investing host: “Exit the crypto market…. It’s never too late to get out of a genuine losing position.”

Famous VC and digital asset promoter: Bitcoin will continue its growth after this dip. It is the way of the future.

Me: Can’t we all just get along?

But seriously folks. There is not an unbiased person in this area. Of course, the guy with all his money in stocks is going to say sell your crypto and invest in the stock market. He couldn’t even tell you the difference between a bitcoin and a Dogecoin other than price. They are all lumped together.  I guess I could lump penny stocks in with Apple stock and call the whole market a scam. And if the on-air expert cant tell the difference, how is the everyday consumer supposed to?

Since I’m writing this a day later, it’s interesting that the same TV personality just said “Calls” were the financial industry’s way to take your money! Seems it’s ok to have risky investments as long as they are on the legacy exchange? There is something to be said, though, about understanding the rules around Calls. Understanding or making the rules around crypto and these exchanges seemed to be too much, even for lawmakers and regulators. Though names such as Madoff, Ponzi, and Miliken have forced government officials to act, so too will current issues.

And, of course, the guy with all his monies moved into bitcoin will say buy and hold more bitcoin. Though we all need to understand bitcoin is in its infancy. It will burn itself touching the stove, and we need to be patient as it grows into its capabilities. There are other blockchains and digital currencies with more capabilities (e.g. Smart Contracts) to be considered as well. It will take a global village to ensure these technologies mature to serve us all as the Internet serves us today.

We have all seen the historic memes about no one wanting a phone, no one wanting a fax, and no one wanting to use the Internet. Investments in these were risky at the time. Though proved insanely profitable for many. There are some great investments in stock and there are also some very bad ones thinking Enron, Lehman Brothers, or Worldcom.

Digital assets are not all the same, just like Apple stock is not like Enron stock or penny stocks. Some could be equivalent to private offerings that accredited investors put their money in. And some are flat-out scams.

My bias is that the stock market can be manipulated. I think the folks at Gamestop will agree with me on this one. And most anything that requires an exchange of value can be manipulated. Let’s not kid ourselves here as digital assets are just another exchange of value. Even the US Dollar gets manipulated in order to “save the economy.” I put that in quotes for effect as I do believe that there are good intentions in the manipulation of the dollar. Whether it should be manipulated was the argument that the original bitcoin buyers were questioning.  And as such, unlike stocks and the US Dollar, bitcoin can only be manipulated at the exchange of value and not in how many there are, an interest rate, or the control they represent. This is not true of many other “cryptocurrencies” as they are very much manipulated just like the US Dollar though though with no good intentions other than to make their owners wealthier.

There is value in bitcoin. There is value in Bitcoin Blockchain. And yes, there is value in several other digital “crypto” currencies and blockchains. The issue is these are but a fraction of the ones out there. And it’s not just the cryptocurrencies that are frauds. Exchanges, the entities that exchange one asset for another, need licenses, oversight, and auditing. The making or managing of large amounts of money will corrupt. The US Government had good intentions in printing and getting trillions of US Dollars into circulation, though now we look back and ask what were they thinking. Good intentions take you only so far!

I stop short of calling any of the characters I may be referring to above frauds or evil people. They all have an opinion, just like me. I try to know my biases and believe, maybe naively, that I can explain technically how the stock market works, how bitcoin was invented, and how currency gets printed and introduced into the markets. There are a few who know these and use their knowledge to manipulate them. Though most either have a belief, ventured interest in one of them, or are out to game the system.

I believe that digital assets and digital currency are going to be a way of everyday life in the future. I’ve often said it may not be in my lifetime. It takes time and a new generation or two to change culture and habits. The rules still need to be written in order for everyone to understand them, including regulators! Old money still rules this world and is not going to give it up quickly or easily. Even they will adapt, and when they do, then we shall see digital currencies flourish.

Today we must continually evaluate every statement, recommendation, opinion, and a talking point as to who is representing it. In Politics, Money, and Power, there is always a bias. Blockchains and digital assets are just one of the latest issues. The key is not to ignore or argue with bias; it is to research it, define it, and work through it to where everyone understands it. Our founding fathers were keen on this concept, and it led to the building of a great nation. One we need to keep on building.

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