January 27, 2022
January 27, 2022
The biggest cryptocurrencies have had a rough few months. If you listened to Matt Damon’s Crypto.com ad implying you’re a sissy girly-man for not buying some crypto, which started running at about the market peak, you’d have lost nearly half your money by now. At the time of writing, both bitcoin and ethereum were down by about 45 percent compared to their highs from last November; BNB was down 42 percent.
Now, they may well go back up again at some point — crashes and recoveries have happened before many times. But it’s an illustration of the incredible risk of cryptocurrency investment. These things are not a futuristic way to get guaranteed returns through the computer; they’re a scammy, useless, and quite possibly doomed hot potato asset.
One amusing thing about the timing of the crypto crash is how it obliterates one of the concept’s principal ideological underpinnings. Bitcoin “is ultimately the only long-term protection against inflation,” wrote Tyler Winklevoss in a blog post in 2020, arguing that it is a better store of value than gold and predicting that it would eventually soar to $500,000. In reality, right now inflation is spiking to its highest levels in decades, and instead of a rush to crypto “safety,” the top coins are all crashing in value — and not by 7 percent but by hundreds of percent on an annual basis.
This is largely because crypto is heavily tied to the functioning of the real economy. In particular, both the…
