The grim prediction of a crypto expert

A renowned crypto skeptic has issued a dire warning to mum and dad investors that more pain is coming after the market collapses.

A renowned crypto skeptic has issued a dire warning to mum and dad investors that more pain is coming after the market collapses.

David Gerard, author of 50ft Blockchain Attacktold Nine 60 minutes On Sunday, he was concerned about the lack of regulation in the industry, where endorsements of celebrities like NBA star LeBron James had created a market full of manipulation, scammers and scammers.

“Everybody loves the siren call of a number going up and they think, here’s my chance,” he said.

“[But] we have to think about the real victims, the moms and dads, the grannies who think their retirement should go into crypto. There’s a real human cost here and it’s ordinary people getting ripped off. You can’t get rich for free. You would think it was obvious, but people keep hoping that there is a way out and that they will move on, but it is always a false hope. Some people do very well, but more people are completely destroyed.

He warned that much of the crypto industry had become a dangerous cult.

“Most of the volume, the way the market works, the way prices are set, it all happens in a completely, literally unregulated environment,” he said.

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“This crash has really made people realize that actually the music is going to stop one day. People who have bought in the last six months alone are going to be stuck with magic beans and they’re trying to find a way to A lot of them are just going to have to take the hit and it’s not going to be nice.

The cryptocurrency market suffered one of its biggest crashes on record last month after the complete collapse of two of the most popular and supposedly “stable” coins, terra and its sister token luna.

This caused the price of bitcoin to plummet below $27,000, dragging the entire market down and wiping out hundreds of billions of dollars in value overnight.

In a single day, over $400 billion was wiped from the market.

bitcoin is currently trading at just under $30,000, having lost more than half of its value since peaking at over $67,000 last November.

Some analysts predicted it could fall as low like $US8000losing 70% of its current value.

“Ponzi scheme”

The extraordinary collapse has led some experts to state that the crypto bubble finally broke.

“Due to the sharp rise in inflation and interest rates, the large unregulated cryptocurrency Ponzi scheme has finally started to collapse,” said the founder of Coolabah Capital and Australian Financial Review editor Christopher Joye wrote last month.

Joye said he “beyond the belief” that these financial products had been pushed on “naïve consumers” with little regulatory protection in place, saying the SEC in the US, the FCA in the UK and the ASIC in Australia had “missed”.

“The main drivers of the crypto craze were interest rates on conventional cash (e.g. bank deposits) which fell to zero during the pandemic, while at the same time governments paid billions of dollars of cash in household savings accounts in an effort to spur greater spending, investment and speculation,” he wrote.

“Animal spirits have certainly been unleashed as all asset classes have hit record highs. As those forces now reverse as interest rates soar (making cash suddenly attractive ) and governments pull back their stimulus, cryptocurrencies have proven to have little value beyond the “hopium” that investors can convince others to put a higher price on them.

Some experts have argued that small “altcoins” could lose up to 90% of their value as billionaire investors scoffed in the wake of the crash.

Longtime Crypto Critic Warren Buffett Again bitcoin slammed as “worthless”, while Bill Gates said in an online Q&A session that he only likes “investing in things that have an output of value”.

“The value of companies is based on how great they make great products,” he wrote in a Reddit Ask Me Anything thread.

“The value of crypto is just what another person decides someone else will pay for it, without adding to society like other investments.”

But some crypto die-hards insist they’re in it for the long haul.

Russian-born crypto entrepreneur Sergei Sergienko said 60 minutes he had lost around $600 million in the accident.

“On paper, yes,” he said.

“Put it this way – there was a week in February when I was a billionaire on paper. [My portfolio is now] a third of what it was or something.

He added: “She’s a bitch, but you know, I believe with all my heart that we’re only at the very beginning of the journey.”

“Crypto-Winter”

Last week, US regulators announced they were suing cryptocurrency exchange Gemini Trust, which is run by Cameron and Tyler Winklevoss, for giving misleading answers in 2017 on a bitcoin project.

The Commodity Futures Trading Commission lawsuit filed in federal court in New York accuses Gemini of not being upfront about how easy it would be to manipulate a proposed bitcoin futures project at the time, the agency said. agency in a press release.

The futures contract launched in late 2017 and ceased trading two years later, according to blog posts from Gemini and a partner company.

Making false or misleading statements to the commission undermines its work to protect market participants, prevent price manipulation and promote fair competition, acting chief enforcement officer Gretchen Lowe said in the statement.

“This enforcement action sends a strong message that the Commission will act to preserve the integrity of the market surveillance process,” Ms Lowe said.

The US agency is seeking financial penalties, the remission of any ill-gotten gains and an injunction prohibiting Gemini from engaging in such behavior in the future, she said.

Gemini defended his record when asked about the pursuit.

“We have eight years of experience asking permission, not forgiveness, and always doing the right thing,” he told AFP, adding.

“We look forward to definitively proving this in court.”

Cameron and Tyler Winklevoss, Mark Zuckerberg’s twin Harvard classmates who sued him for claiming he stole the idea for Facebook from them, created and ran New York-based Gemini.

The brothers told Gemini employees on Thursday that about 10% of them are being laid off as staff are reduced to endure a “crypto winter” likely to linger for some time, according to a copy of the email. published online by the company.

“The crypto revolution is well underway and its impact will continue to be profound, but its trajectory has been anything but gradual or predictable,” the brothers said.

The industry is in a “contractionary phase that is settling into a period of stasis – what our industry calls ‘crypto winter’,” compounded by macroeconomic and geopolitical turmoil, they added.

— with AFP

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