When someone evokes the term “Ponzi scheme” in connection with any kind of asset or potentially alleged money-making theme, it’s only natural to start looking for the suckers. As it’s been said numerous times, if you look around the poker table and can’t identify the sucker, then it’s you.
Are Cryptocurrencies Ponzi Schemes?
So what about cryptocurrencies? Perma-bears run the gamut from those who simply argue that they aren’t worth anything to those who think they are nothing but a scam from grifters just waiting to take your money.
On the other hand, perma-bulls see nothing but blue skies for cryptocurrencies, no matter how bad things seem to get. So bitcoin is down by almost 40% year to date. Better buy the dip and hodl (hold on for dear life!). But what about stablecoins? Some would say they’re the future of cryptocurrencies or the bridge between fiat money and crypto.
Perhaps not, or at least it depends on how they are structured. The shenanigans involving the so-called stablecoin Terra (UST) should raise some serious questions about cryptocurrencies. Supposedly, Terra was pegged to the U.S. dollar, so one UST should always be worth US$1. However, the “stablecoin” plummeted as low as 26 cents at one point, so that should leave even perma-bulls asking, “Now, how can that be?”
The…
