Virtual implosion
The virtual investment promises were compelling: High return, no inflation risk, complete safety, absolute privacy, and immediately transferable to anywhere. Moreover, there was no interference – no regulations, taxes, fees, red tape. Clearly, this virtual investment would be the top choice in the modern age. Nothing could go wrong with the latest innovation: Cryptocurrency.
Oops!
It turns out there was a “hidden” weakness. New buyers were required to reward previous buyers, thereby attracting more new buyers, just like in Charles Ponzi’s scheme (and the countless others that occurred before and after his). Should sellers outnumber buyers, the cycle reverses.
It appears that day has come. The heavy hitters who are less enamored with being part of a modern movement appear to be selling. Those vacating “investors” likely include a mix of privacy seekers like dictators, oligarchs, organized crime figures, and ransomware attackers.
Making matters worse are the leveraged funds of funds that compound returns only if prices rise. Otherwise, they go bust as investors bail.
Finally, there are the offshoots. Their implosions give the same message as dying canaries in a mine: “Get out!” NFTs (non-fungible tokens) are a good example, but nothing says the party is over like stablecoins.
Stablecoins – created for reasons that undermined the entire cryptocurrency rationale
As noted in Investopedia, “stablecoins are cryptocurrencies…
