It's safe to say that cryptocurrencies are seeing renewed interest since the crash of 2022. Bitcoin just reached its highest price since 2021, SEC Approval of Bitcoin ETFs It made investors very excited, and the market capitalization of all cryptocurrencies was just hacked 2 trillion dollars. But everyone who is willing to be afraid to venture into the world of cryptocurrencies should ask themselves: Should we really be doing this again?
The last time the cryptocurrency market was this hot was late 2021, and things were looking very rosy in the world of fake money. Bitcoin has reached an all-time high of $69,000, and there have been countless TV ads featuring celebrities selling cryptocurrencies. Super Bowl LVI played now-infamous ads promoting Larry David and LeBron James FTX and Crypto.com respectively.
Matt Damon even appeared on TVs early in the last big cryptocurrency hype cycle, debuting in October 2021 with an ad that insisted… Fortune favors the brave, just one month before Bitcoin reached all-time highs. This ad would have been widely ridiculed, but it helped pave the way for a lot of heartbreak when ordinary, hard-working people entered into what they thought was a good investment.
There are plenty of signs that cryptocurrency history is about to repeat itself. The cryptocurrency “Fear and Greed Index,” maintained by Alternative.me, has reached its highest “greed” level since November 2021, according to Coin Telegraph. pointing to. Peter Thiel's Founders Fund reportedly bought $200 million worth of cryptocurrencies starting last summer and continuing into the fall, according to Reuters. This means that Thiel likely entered at a Bitcoin price of around $25,000, half of what it is today.
Should you invest? Not with any money you can't afford to lose. Crypto is a Ponzi scheme. And you can run a Ponzi scheme as many times as you want, as long as people are willing to hand over their money. Cryptocurrency advocates will insist on numbers like Sam Bankman Fried, the disgraced chairman of collapsed cryptocurrency company FTX, were just bad apples. SBF was found guilty of seven counts of fraud and conspiracy in a highly publicized trial that caused ordinary people to lose faith in cryptocurrencies. But the truth is that the entire cryptocurrency project is a house of cards. No one has yet presented a great use case for cryptocurrencies other than purchasing drugs on the dark web or other largely illegal activities.
In fact, the US Treasury Department just issued a Report on Tuesday About how popular cryptocurrencies are with human traffickers and producers of child sexual exploitation materials. Bitcoin is the digital currency of choice for the scum of the earth. It simply does not perform well as a currency due to its highly volatile nature. Why spend Bitcoin to buy a pizza if the price of your Bitcoin could double in a short period of time?
Bitcoin is such a bad technology that it was necessary to invent stablecoins in order to trade effectively since the blockchain can only handle a small fraction of the transactions that established financial networks like Visa can handle. This is where SBF ran into trouble since it paid an old FTX investor, Changpeng Zhao, in FTX's native token FTT. And when Chow tried it Cash out this token— which, again, was fake money created by FTX — flipped the first domino from which FTX never recovered.
But you don't have to take advice from me. I've been skeptical about cryptocurrency for years and still think it's greatly overrated. But I also thought it was overvalued in 2019 when the price of Bitcoin soared It was $5000. If you had bought at this price five years ago and kept it without selling it, you would have ten times your money today. The problem, which is similar to the stock market problem, is that you need to be able to time the market. Buy low and sell high, as the old saying goes.
Thiel buys low and sells high. But the public doesn't know about the timing until long after it happens. If history is any guide, the price of Bitcoin is likely to rise in the near future, just as it is steadily rising now, causing a lot of people to buy at the peak. That's when people like Thiel will sell, before the next inevitable crash.
If you think you can time the market and make some money from cryptocurrencies, good for you. Make your money. But with Bitcoin potentially approaching the all-time high of $69,000 achieved in late 2021, most people will be forced to buy expensive Thiel bags and sell after another collapse out of frustration. Thiel has likely already doubled his money at the current price of Bitcoin. We won't know for a long time when Thiel will be out of office. When the public finds out, it will surely be too late.
