“I don’t trust crypto; it’s a scam.” Investors often say this when they talk about cryptocurrencies. They suggest that the crypto space, which is still young and developing, broadly does not inspire confidence.
Investors tend to let their guard down when prices go up. We saw it last year during the full-market euphoria. It was all about FOMO, or Fear of Missing Out.
On the other hand, the level of mistrust tends to spike when crypto prices fall, which they’ve been doing since January.
The cryptocurrency-price craze last November reinforced the idea that the crypto sphere was just bitcoin. But the industry is much more than bitcoin and other digital currencies like ether, dogecoin, tether and shiba inu.
It is also decentralized finance, or DeFi, including loans and complex financial assets. This is a disruptive ecosystem that replicates all aspects of the traditional financial system — with the key difference that the middlemen are eliminated and there are no barriers to entry.
And the factors that make crypto and DeFi unique and attractive are also those that make the sector vulnerable to scammers.
Everyone Can Create a Coin … and Fast
The numbers are stark: 46,000 people reported losing a total of more than $1 billion to crypto cons between January 2021 and March 2022, according to the Federal Trade Commission.
Scams are on the rise. The recent collapse, over just a few days, of the UST and Luna coins wiped out more than $55 billion. This scandal has left many retail…
