Cryptocurrency bubble risks exposed by Bitcoin’s recent slide – ABC News

Cryptocurrency bubble risks exposed by Bitcoin’s recent slide – ABC News

They seem to be almost everywhere. Cool looking hipsters livin’ the dream after amassing a fortune in the world of crypto.

Social media sites are overflowing with them. Even old school glossy magazines, barely clinging to life, have dialled in with tales tall and not so true of the fabulous riches to be earned in the ether.

There’s no doubt they exist. Those that either got in early or built financial structures that facilitate trades which, none like to admit, replicate old style banks and broking houses, have socked away unimaginable riches.

But what of the hoi polloi? How many newly arrived crypto traders, just for example, lost their life savings last weekend, when bitcoin and the crypto universe plummeted?

Just like pokie addicts and those who frequent the track, the wins are talked up while the losses often are forgotten.

The allure may be the same; the chance to strike it rich, big time. But, unlike ordinary gamblers, many crypto devotees have embraced what they believe is the future of finance with a kind of religious zealotry that insulates them from reality.

Launched in 2009, Bitcoin was supposed to liberate ordinary citizens from the shackles of government and nation; an alternative, independent and truly global financial system.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume.Bitcoin explained: Everything you need to know about the crypto craze(David Chau)

More than a decade later, however, and the faithful can’t, or refuse to, recognise the ultimate irony. Instead of overthrowing traditional currencies, bitcoin and its 10,000 or so imitators are still priced in them.

The devotees, even the famous and fabulously rich, measure their wealth not in BTC but in greenbacks, yen, pounds, euro and Aussie dollars.

Money, money, honey

We all want it. We all need it. But precious few know how it truly works.

Money, even good old fashioned notes and coins, is a complex and little understood phenomenon that relies on faith; that it is backed by real wealth and that it will be redeemed. Even then, there are competing theories as to how it operates, how it is created and how it is controlled and manipulated.

At its most basic, it is a medium of exchange. And it usually is backed, either by the implicit promise of a government or some other store of wealth, like gold.

Bitcoin was supposed to provide an alternative; an island of stability in …….

Source: https://www.abc.net.au/news/2021-12-13/cryptocurrencies-on-a-knife-edge-bitcoin-decline/100694872

Cryptocurrency