I'm not pro-crypto or anything but how is that different from the stock market in general, or venture capital investment even?
SVB implodes and investors (but not depositors) lose everything and it's ok.
You're nuts if you think there's no insider trading or pump and dumps on the stock market.
Seems like a double standard.
This all has more to do with maintaining a monopoly on the financial system and certain classes of participant in the US wanting to maintain the power to collect rents. And there really is no counterbalance to their unchecked authority.
Now, some stocks have a real value + speculative value on top. Netflix and many other tech companies are in this state, and the speculative value can go down way more than the real value. But the floor for Netflix stock is waaaaaaay above 0. The floor for BTC and similar is 0, by contrast.
As for pump-and-dumps and insider trading etc - sure, they happen, just as thefts and muggings happen. But they happen a lot less then in crypto-land where they are fully legal, and where, even if they weren't legal, no one would be checking for them.
"Bitcoin to zero" is a matter of faith at this point, I don't see it happening and I haven't heard anyone explain a good model for how it happens. US is certainly trying its best to outlaw it. Still won't go to zero.
I think my larger point is if the government wants to go after something, go after fraud--in crypto or "Fintech" or banks or stocks or whatever. And mostly they are! But then they're also leaning on banks to cut off the ability to convert crypto to fiat and that's a bunch of bullshit.
There are even corporations that announce buyback and then don't do it. For stock it's enough to jump up and then random shareholders that accidentally sell their shares in specific window that allows them to profit from such fake buyback get very rich while people waiting for buyback are left with the bucket. It's completely not pump and dump.
Let me tell you about the 90s...
"Expressing optimism or pessimism" also doesn't sound very scientific or rational.
Just for example the amount of wash trading in crypto is substantial, and if done on stocks would be found and prosecuted.
The entire cryptocurrency universe can go away and people can blow their disposable income betting on the horses or eating out instead. There will be no good or service missing in the market.
A lot of services would go missing, actually!
Ransomeware gangs would no longer be able to easily receive their ill-gotten gains. The North Korean regime would lose a major source of funding. Darknet drug marketplaces would have a much more difficult time facilitating illegal activities. Etc.
It should also be telling that just betting on the best performing stocks consistently is a more successful strategy than using intricate metrics and trendlines to try to predict future successes, just as counting cards is a better strategy than whatever astrology habitual gamblers come up with. Of course nothing tops the success rate of "insider trading" (i.e. cheating), which is why it's illegal.
What happened with GameStop and other meme stocks is exactly the definition of a pump-and-dump.
... and I say this as someone with enough faith in the stock market to invest heavily in it.
So is gambling.
Of course, "Illegal stocks" (or their equivalent) and illegal gambling aren't.