I swear it. And my buddy George will back me up.
I said many months ago that Crypto is a sort of Ponzi scheme and that as soon as inflation hit and people started to need to use their money, cryptocurrencies would hit the floor.
Right now, we are seeing Bitcoin, Ethereum, and others dropping at a rapid rate, at least one “stable” coin, pegged to the dollar by an algorithm, drop by 75%, and a major player Coinbase actually talking about going bankrupt and losing the cryptocurrency from its customers.
A minor bloodbath. These guys have seen this before.
To put this in perspective, cryptocurrencies are actually still many times higher than they were two years ago. There has been a lot of speculation driving prices up, but the weak of heart have been temporarily scared out of the market. This is a sport, like horse racing, I’m guessing they will be back.
I’m not making a prediction here. I’ve never bought any significant amounts of cryptocurrency, I see that market as way too volatile. I have no skin in the game so you shouldn’t take my advice anyway.
I am seeing an opportunity and acting on it, though. Cryptomining appears to be a good investment, which as best I can tell will yield a 30% to 80% annual rate of return for the near future. And this is all a positive rate of return, as long as the market holds up until the breakeven point of one to two years. (FYI, most computer nerds know how to do this, but they don’t know how to manage heat and power, it’s a barrier to entry, and I have an advantage there…).
Wait, did I say I wasn’t making a prediction? I just voted with my feet, so I guess I am. I believe this hugely volatile market will go back up by the end of the year. No, Bitcoin will not reach $100K, but it will rise as speculators jump back in.
I believe that eventually, crypto will recover from this crash, and then have a much greater crash in the next 3-5 years. This wasn’t the “big one” just yet. But this is not exactly a Ponzi scheme, and even if you see it that way, people still make money from Ponzi schemes. There are some good ideas for practical crypto that are moving ahead, so I’m thinking perhaps this market will eventually blossom beyond the Ponzi/speculator phase and become more and more real (NFTs not so much…).
And just so you know this has a political spin, this is Biden’s inflation, and the crypto crash is another aspect of his bungling of the economy. You will see hundreds of minor disasters like this over the remainder of his term, all totaling to a much larger disaster.