Comments | Do you think you are the one who beat the crypto crash? Think again.

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I don’t usually seek financial wisdom from students, so when I started hearing last year from my kids that their classmates were putting money into cryptocurrencies, I was concerned. With all due respect, this is not, as a rule, a smart or financially savvy crowd. When one of my sons asked skeptically if this wasn’t just the latest Dutch tulip craze, one of my classmates said it was different—”You’ve got to know when to get out.”

Well, maybe it’s no different after all, because it turns out that not many people have that ability. When TerraUSD, a stablecoin – a cryptocurrency that is supposed to be pegged to the dollar or another asset – lost almost all of its value this month, it happened so quickly that many investors lost everything they had in the market. Another stablecoin, DEI, fell to 52 cents, instead of the promised dollar. Bitcoin itself, which is not tied to any currency, is down more than 50% from its peak last fall.

In many cases, it is the people who are least able to bear this kind of loss who suffer the consequences. Cryptocurrency has been aggressively marketed as an opportunity to catch up with groups that have felt left behind in the still unequal United States. Time and time again, proponents have argued that blockchain will be a force for financial justice, empowering people traditionally excluded from American wealth-building mechanisms, such as housing or the stock market, because of race or lack of capital.

“Fortune is smiling for bravery,” Matt Damon announced to, an exchange where people can buy and sell more than 200 cryptocurrencies, in an ad broadcast during the Super Bowl. (He is now, somewhat less bravely, refusing to answer NBC News questions about it.) Kim Kardashian dropped a coin, which quickly fell by 98%. Politicians have argued that encryption will make the financial world fairer. Representative Richie Torres (D-D), who represents a low-income neighborhood in the Bronx, called it a “deeply progressive issue.”

please. This is, at best, a guess. Despite all the claims that blockchain will revolutionize the field of finance, the only thing that has been improved so far is the ability to launder money and funnel funds for other illegal activities. Hedge against inflation? The theory did not work. An alternative to cash? Try to use it. It’s hard and time consuming, and I promise you’ll get back to traditional currency right away.

Problems persist. Regulation is light to nonexistent. Theft and fraud are common and victims cannot resort to it. If your credit card is hacked, you’re at risk for only $50, but if your multi-million dollar crypto wallet gets picked, you’re SOL, as they say online. And despite all the talk about letting everyone take part in the event, just over 25% of bitcoin is owned by 0.01% of investors.

However, 1 in 5 Americans of investment age has taken the bait, and many cannot afford the risk. In survey after survey, young people are more likely to adopt the industry than middle-aged and elderly people, and blacks are more likely than whites. And one more thing: the halving began investing in the sector in 2021, according to a survey published by Grayscale Investments, a cryptocurrency management company — in other words, when crypto was at an all-time high. (A survey conducted by Cardify, a market research firm, last fall, found that only 14% had invested in the sector for more than two years.)

None of this should inspire confidence. That’s right, whether you sincerely believe that the world hasn’t harnessed the power of blockchain yet, or whether you believe, as the spirits on Twitter say, that the blockchain and its cryptocurrency are Beanie Babies for Bros, disguised as technical libertarian gibberish.

Even if the full potential of Web 3.0 is realized and blockchain is its infrastructure, that doesn’t make this thing a good game. Railroad was one of the advanced technologies in 19th century America that created countless fortunes for a lucky few, but about 25% of the railway companies went bankrupt. Ironside after the Panic of 1873. The same thing happened again after the Panic of 1893.

The dotcom bubble offers a similar lesson: Amazon has done so well that its founder now owns this newspaper, but is a hit point. As Securities and Exchange Commission Chairman Gary Gensler said recently when discussing cryptocurrency, “I don’t think there is a long-term viability for five or six thousand forms of money, especially.”

It’s a brand, well, for brands they think can outsmart it all — they’ll pick a cryptocurrency that survives and rises, or they know exactly when it’s time to get out. They can’t all be right.

Cryptocurrency arrives in that beautiful American spot, where sarcasm meets sheer naivety, and everyone thinks that the person sitting at the table is someone else. By the time many find out they are the biggest jerk, it’s too late to do anything about it. The fact that these people in many cases already receive an initial presentation makes the situation even more painful.

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