I am not a fan of cryptocurrency. I regard it as a scam, and I somehow can't stop repeating myself on the topic. Witness the screenshot below, showing some (not all) of my past blog postings making the point.
Don't bite! That is my oft-repeated advice on cryptocurrency:
A relatively recent article in The New York Times is what has prompted the blog posting you are reading right here. The article was titled, "What Trump’s Embrace of Crypto Has Unleashed," and it points out that "a boundary-pushing array of new crypto ventures have reached the stock market, enticing investors and leading to more risk taking." Something new has been happening, with respect to crypto, and our current president is right in the middle of it. Here is a brief explanation by The Times:
Mr. Trump has turned the once obscure world of digital currencies into a major force in the global economy. Declaring himself the first “crypto president,” Mr. Trump ended a regulatory crackdown on crypto companies, promoted crypto investments from the Oval Office, signed pro-crypto legislation and even launched a “memecoin” called $TRUMP.
That our current president has used his position to increase his own, individual wealth, and the wealth of his family, is nothing very new. Today, all across the country, "No Kings" demonstrations are protesting our current president's ceaseless efforts at self-enrichment, as well as protesting how our current president has sought to usurp the powers of the people. As I trust we have all learned, that is just how this guy rolls. And that's bad, of course! What's perhaps worse, though, is how his actions may compromise the economy:
A wave of companies have started offering products that make it easier to incorporate crypto into brokerage accounts and retirement plans. And industry executives are pitching regulators on a plan to offer coins that represent shares in public companies, which would be traded in a crypto-powered version of the stock market.
The rush of experimentation has already led to problems. Major cryptocurrencies crashed over the last two months, sending businesses that had loaded up on the assets into free fall. Other new ventures have drawn warnings from economists and regulators who point to mounting risks.
At the center of the concerns is a rise in borrowing. By this fall, public companies had taken out large loans to buy crypto. And investors had placed more than $200 billion in bets on future coin prices, a type of trade often made with borrowed money, which sets buyers up for major gains or crushing losses.
The industry’s latest offerings have also linked crypto to the stock market and other parts of the financial world, raising the prospect of a chain reaction that spills a crypto crisis into the broader economy.
“The line between betting, speculating and investing has largely disappeared,” said Timothy Massad, who served as the Treasury Department’s assistant secretary for financial stability after the 2008 recession. “It’s very worrisome to me.” (emphasis added)
That the financial sector of our economy has been turned into a blind betting pool should be "worrisome" to all of us. If, or when, the entire economy tanks, because of a huge failure in the "crypto" universe, those who foolishly bet on one or another form of "crypto" won't be the only ones hurt. Thus, my "don't bite" advice needs to be updated. Individually, we should not be putting our own money into investments in "crypto," but if the whole economy goes down (think about what happened in 1929), everyone's economic position will be compromised, and the nation's economy, itself, might founder.
It can't happen here? Or it can't happen "now"?
Wishful thinking, I'm thinking. It's time for Congress, that set of elected representatives that is supposed to represent us, to start doing something about the economic dangers that threaten (and here's that word, again) "us."
Our current president is representing, and looking out for, himself. That's about the extent of it. Let's use these elections coming up this year to put people in office, as Members of Congress, who will care about us, and not just care about themselves. There's a lot of time before November, and things can go (badly) wrong with our economy. The promotion of "crypto" by the national government is "worrisome," indeed, and we may just have to keep our fingers crossed until we can do something more directly - by electing representatives who will actually represent us, and who will do something about the economic dangers to which the promotion of crypto has now exposed the nation.
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