Price collapse proves crypto has no value and is worthless

[YouHaventDoneAnyWork]

Headline in the newspapers today.

Sad for anyone who bought into this pyramid scheme without understanding the technology (few really do) and therefore risks and has now lost money, but AIBU to think this should be banned like the financial fraud and environmental disaster it is and hoping this is the beginning of the end.

I missed this, pretty big news

without confidence people will scramble to get out

Yes I tend to agree and nft’s too. Prices will go up again as people pile in ( those whose savings haven’t been wiped out) to buy on the dip and it’ll all take off again for nice more. I think price volatility is actually the point of it sometimes, crashes are good for buying more!

True it’s volatile but can attract people at the dip

Why do you call it a pyramid scheme? Sure pyramid schemes can be run using crypto (see one coin) but I don't see how crypto itself is a pyramid scheme?

And much is being made of the drop in crypto this time round, but crypto has long been known as high risk and wildly fluctuating. Plus, this week there was the sharpest fall in global equities since the start of the pandemic, so traditional investments and also being hit at the moment.

I don't have any crypto investments, but I also don't particularly get the negative media position on it.

Totally disagree. Digital assets are here to stay, market crashes happen in all assets classes, and seems this one is due to market manipulation by a handful of banks/hedge funds.

Regulation is needed to reduce risk however.

I think it’s different from other assets classes however as say if houses crash or wine or art you can still live in the house, drink the wine or enjoy the art. What are you going to do with Luna coins in your digital wallet?
get on a tube train and you will see posters about crypto currency, a sign it has reached the masses ( young men mostly) and most of them have no clue what they are buying.

The main issue with crypto and nfts is the huge environmental cost of it.

Ethereum consumes as much energy as a small country to run their business of generating nfts. That's fucking insane.

well, duh

Glad it happened sooner than later. The fewer people at the bottom of the pyramid the better. I still cringe when I see adverts for it - there aren't enough disclaimers in the world to warn people what bullshit it is.

Crypto is not a pyramid scheme but it is far too volatile to be anything but a niche product.

Just imagine going to bed with 100 grand in the bank, ready to transfer to your solicitor as deposit for your new house in the morning but overnight, there has been a crash so now you only have 10 grand.

I’d love for someone to describe how it’s not a pyramid scheme.

It has no intrinsic value, no underlying cash flow and no link with assets that do/can have tangible values.

I agree we should all be mindful about the amount of energy we consume and take steps to reduce this whenever we can.

I think the problem comes when the energy intensive way of doing things provides a benefit. There are people using ethereum to solve problems with contracts and bitcoin to provide (what they perceive to be) long term stability in finances.

If someone said that worldwide hairdryer use was equivalent to all the energy used by the US State of Connecticut, I would think, Hmm, that’s a lot of energy, probably people are happy to be using and paying for that energy to dry their hair. I wouldn’t be campaigning to stop people from using hairdryers.

All investment has risk. I wouldn't invest in crypto as I just don't know enough about it.
Sort of reminds me of Junk bonds.

I don't think it's the end - as long as there are opportunists and gullible fools there'll be a market.

@MarshaBradyo no one's "buying the dip," retail flows are negative for the first time in over 2 years and that's across asset classes. Institutional doesn't buy the dip.

The underlying technology is here to stay, but for now, crypto is correlated with the Nasdaq and certainly not the "inflation hedge 😂" it was thought to be. Impossible to tell where this will all be end of 2022/early 2023 when inflation in the US is thought to start receding. Until then, I'm holding.

It's a bonkers set up which was always going to end in tears. The crypto fans don't trust currencies run in the convetional way but are happy to trust one run by a bunch of crooks. It makes no sense.

A pyramid scheme had you paying in money, usually for a tangible product, and people above you in the scheme take a cut of that. Crypto is not like that. There is no single entity in control or at the 'head'. Everyone invested in crypto has lost the same percentage value, however much they hold. The entity at the top of a pyramid scheme keeps all the money after the pyramid has collapsed.

Hyperinflation of currencies, such as in Germany and Zimbabwe happen over a period of months or years. If you know of faster examples, I am happy to be educated. Stock markets crash over a day or two. Crypto crashes seem to happen in hours.

But "real" money only has value because people agree it does. And as for tangible assets, then if you can covert your crypto into money to buy a house then how is it any less real than the £10 note in your pocket (which is basically an iou)

If we were still operating on the gold standard, the point about tangible assets would be more convincing, but I'm struggling to see what you mean otherwise.

As an aside, there was a really interesting In Our Time episode on the Gold Standard a while back about the benefits and eventual downfall of ascribing the value of money to physical assets. And why it worked during relatively stable times, but eeffectively failed after ww1 upended the world order to significantly. Really worth a listed if it's still on bbc sounds.

I think the people who see this "crash" as the end of Crypto do not understand much about the subject. I bought a lot of crypto in 2017 and 2019 and even now during this "crash" it is worth 3-4 more times the purchase price. It dips, like all markets have currently dipped but undoubtedly it will go back up again.