I feel bad for whoever is going to be left holding the bag when it all “pops” and the funny money can no longer be converted into real money. It’s going to do real damage to those that, unlike Zhao, haven’t been able to cash out.
When the schemes collapsed, there was uncontained rioting, the government fell, and the country descended into anarchy and a near civil war in which some 2,000 people were killed.
And good luck leading the revolution, Winklevos twins…
The average Coinbase account has $1k in it (the median is even less). Not exactly riot-worthy.
This is sort of frog boiling. It's legal tender in one of the world's poorest countries, where there were already Bitcoin riots. The space has seen investments from the Quebec pension plan, and the Ontario teachers pension plan.
If at each milestone we step back and say, well, it's not a systemic risk today so let's just ignore it - one day we turn around, and it's a systemic risk to the global financial system. Mortgage backed securities weren't a risk until one day they were. Albanian MLMs weren't a risk until one day they were.
Just like Bitcoin's electricity usage. Hal Finney mentioned CO2 risk a decade ago. Now it consumes an entire country of power to do the work of a single Raspberry Pi. Each time the price goes up, so does its waste budget. However at every step along the way, folks continued to downplay. The longer we ignore it the more the cancer metastasizes. Until one day, pop.
Forget where it's at now, assess it based on its incentives and its trajectory. It won't get regulated unless people speak out. The sooner, the better.
But no, leverage isn't what took down the Albanians. It was investing 50% of their GDP in unproductive MLMs.
I agree with your comment but maybe you meant to say “a third less”? Crypto is ca. 70% of AAPL mcap.
https://grayscale.com/wp-content/uploads/2021/12/Grayscale-2...
I would expect something like that in countries with more unstable currencies or serious economic issues like how Greece was a few years back but on the other hand it's more mainstream right now right?
I think you can notice this best on a new coin. I was looking at chia for whatever stupid idea they had with proof by useless storage.
https://coinmarketcap.com/currencies/chia-network/
If you go to the 5 year market cap chart, it goes from 0 to 342 million when offered. That is 342 million dollars out of thin air backed by nothing.
Now it is at 248 million but there is no future cash flow that is being valued at 248 million by the market as it was an equity. It is really -94 million but the 248 million is still being summed into that bogus total market cap.
Are just a few thousand crypto bros gonna lose billions of made up money or will it really have any impact on realworld finances?
I wish I knew what will finally spell the end of Bitcoin.