Cryptocurrency is still fairly new when we consider Bitcoin launched in 2009. Since then, there has been many scams, but not enough clear-sightedness to make the average investor aware of such unscrupulous market acts.
Having studied crypto these last years the logic behind such a scheme makes me feel there is much resilience to private firms using crypto to make it mainstream. However, with a reportedly USD 2.5 trillion, and many savvy venture capitalists behind it the tendency for gullible muppets is vast.
In today’s blog I’m going to mention USD billions of investor’s capital lost by seven crypto firms that collapsed in 2022:
Axie Infinity’s Ronin Bridge hacked
Terra USD/Luna collapse
Three Arrows Capital Collapse
Voyager Digital’s fall
Celsius crash and liquidity crisis
FTX collapse
BlockFi bankruptcy
Find out detailed information about what happened by clicking on the link above.
One major issue of digital tokens i.e., cryptocurrency options is that the majority aren’t accepted as payment for goods.
The firm Tesla, led by Elon Musk, invested $1.5 billion in bitcoin in February 2021, reportedly accumulating around 43,000 tokens. In the same month, Tesla said it would begin accepting bitcoin as a form of payment. The company, however, walked back on its intentions in the subsequent months. 18 October 2023
Does Tesla still hold Bitcoin?
This means that Tesla missed out on an extra $500 million in profit had it not sold its Bitcoin in March 2021 and June 2022. Tesla still holds 9,720 Bitcoins, worth around $400 million at current prices. It will be interesting to see whether it holds on to the tokens in 2024 or sells. 1 February 2024
There is a mixture of reports, often written by those who have a vested interest in cryptocurrency. The market has had highs and lows and that indicates volatility. Although the market is on a high at this moment, Bitcoin as an example is still much lower than it was a few years ago. No one has a crystal ball and can see into the future.
Decentralized finance (DeFi) is an emerging financial technology that challenges the current centralized banking system. DeFi attempts to eliminate the fees that banks and other financial service companies charge while promoting peer-to-peer transactions.
After enlightening discussions with member countries, the IMF and the Financial Stability Board published a report last September offering guidance on rules for crypto assets. Among the main elements: do not make crypto assets legal tender or official currencies.
As far as they're concerned, funds made from crypto is as good as dirty money. Also, people don't really pay any tax from crypto gains unlike stocks. And if you think about it, crypto and defi is pretty much a direct competitor to the banking system. So, it's also in their best interests not to entertain it. 6 December 2023
The financial industry is also experiencing a profound transformation because of digitization. New technologies such as blockchain, smart contracts, and more have paved the way for advanced financial solutions shaking up the status quo. These innovative solutions offer a level of efficiency, security, and convenience that is unmatched by traditional banking systems.
So, the transformation of the financial industry began with the rise of alternative financial solutions, such as centralized and decentralized crypto exchanges, NFT marketplaces, and many more. Then, traditional financial institutions have seen the full potential and high demand of these new technologies and got the necessary to implement them to stay competitive. This digital transformation is bringing the financial industry to the forefront of a technological revolution and evolving even the most conservative players.
In hindsight, the probability of random tokens that represent financial value which currently are not accepted as a formal way of buying goods by most and then going mainstream is extremely unlikely when you consider there is so much unacceptance by the regulatory world, we live in.
The majority conform to rules and regulations in the society in which we live, so to be bullied into a wider acceptance of cryptocurrency creates a logical conclusion against its implementation. In other words, of the 26,000 cryptocurrencies currently being publicly traded which ones will survive?
The thing you have to ask yourself is how much will a Bitcoin token be worth in the future? Will it maintain it’s value when banks publicly promote digital services? These thoughts are in the eye of the beholder. Think wisely before investing in cryptocurrency.
Take care!
Prof. Carl Boniface
Vocabulary meaning:
Gullible (adj) = if you describe someone as gullible, you mean they are easily tricked because they are too trusting.
Muppets (n) = a type of puppet created by Jim Henson or his studio, typically operated with one hand of the puppeteer inside the head and a rod or glove to move one arm of the puppet. In other words, easily moves to facilitate one’s command.
The eye of the beholder (idiom) = means a matter of personal opinion
Wisely (adv) = astutely, intelligently, cleverly, prudently, sensibly, judiciously, (ant) foolishly
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