You can criticize crypto currency’s for a lot but I still have never seen a good argument for it being a ponzi scheme. Can someone further this argument to one that wouldn't cover every investment asset?
With Bitcoin, you have a cryptographic string. You can't make anything with it, it's not interesting to look at, it doesn't pay dividends or coupons and you almost certainly don't have any debt denominated in it. The only reason to hold it is the hope someone else will buy it from you for a greater price in future, and the only reason to believe they might want to do that is a claim that it's a "store of value" based entirely on the profits earlier holders made selling it to new ones.
It may not literally be a Ponzi scheme, but the dynamics are the same.
My point is, the same kind of network effects that make social media valuable, are also inherent to cryptocurrencies like BTC. Metcalfe's law applies. Just like fiat currencies, actually.
So yes, new entrants are obviously important to achieve an increase in value (and therefore, price). But does that necessarily make it a Ponzi scheme? I don't think so, because a Ponzi is fraud, a scam, by definition. It needs to be done with the malicious intent of stealing the money of new entrants. That's not the case here. Of course new entrants might be convinced by speculators seeking profit to buy in when BTC is actually highly overvalued, but, the same applies to any other investment really (look at what's happening to TSLA).
https://en.wikipedia.org/wiki/Duck_test
So you have the non-existent assets, bag holding, difficulty getting out and the promise of above average returns.
If I put my money into my saving account then I can get out at a clearly stated time, there is no expectation apart from very little interest and I am reasonably sure that the government will bail out the bank if the bank fails.
In between there are a spectrum of investment options, property is a good investment asset and you actually have a property made from things like bricks and glass as the 'store of wealth'. Yes it might be difficult to get out if there is a property crash. But it is not a ponzi scheme even if it has some characteristics of one.
IMO it's Bitcoin in combination with Tether that's the actual Ponzi. Unfortunately unlikely to unwind until and unless people start needing to redeem Tether rather than selling it on.
Bingo.
The problem is, the big players have no interest in unwinding the scheme. As long as exchanges can wash trade USDT:BTC to drive the inflow of retail investment, things keep going.
What'll be interesting is if BTC continues to fall. I think the low $30k is a support level; if it crashes below that, I bet we're going to see more outflow from undercapitalized exchanges and things will adjust hard.
They don't disclose details, yes. but neither does your bank, really.
Finance tends to be tight-lipped.
https://www.google.com/amp/s/amp.ft.com/content/529eb4e6-796...
It still isn't backed 1:1 based in their own admission. This isn't about being tight lipped, this is willfully misleading customers.
the fed requirement for reserves today is literally zero percent.
they are just an offshore bank, none of which have insurance and very different reserve requirements. Hold trilions of dollars.
Just clickbait articles farming eyeballs.