As we all know, Bitcoin is jumping all over the place moving as much as 20% in a day. There are smaller crypto coins including jokes like Dogecoin (which I have heard pronounced both as dog-e-coin and dough-g coin) that can move even faster. Such "assets" are like playing a slot machine and anyone who has played the slots knows that they are for entertainment only because sooner or later they take all of your money. They don't call slot machines "One armed bandits" for nothing.
The bigger problem here is now there are just too many people who are gambling in the markets in crap like this and at some point they will all get fleeced. And when they do, they will cry for government to "do something". Take the case of GME where after the system reacted to success of the little guy by moving the goal posts, not some much because they wanted to but because it was systemically critical for Robinhood to do so. If the suckers figure out how to play the slot machines so that the house loses, very quickly the house must outlaw or intervene on that behavior or the casino goes under. So the casino can say that they are doing this for everyone's safety, blah blah blah. But the reaction by the suckers was obvious - call in the government "to help" after they have already gotten fleeced.
And so it will be with bitcoin and the likes of Dogecoin. They will collapse with 1 trillion of fake market cap and it will create this wealth effect vacuum which can suck down stocks. Why? Because those idiot companies who are now holdeling bitcoin on their books will lose billions in value given that they have traded relatively stable dollar cash for completely unstable crapcoins. The losses will be sudden and in a good number of cases we could find that corporations can become insolvent overnight.
The fed should be sitting back and watching all of this with a smirk. When Dogebit or whatever shitcoin, including bitcon, collapse, the fed can step in and repeat Yellen's argument that cryptos are a good idea but that only government has the discipline to ensure stable value via their open market operations. She has already indicated that bitcoin is not green (uses a ton of electricity), is inefficient as a transaction tool and is wide open for use by criminals, etc. But unless and until the stupid people come crying for government help, it would be very bad optics for government to shut down private cryptos. However, they can be working behind the scenes to make sure they fail, using their secret open market operations to ADD to crapcoin volatility.
It will not surprise me to find, 20 years hence, that the fed manipulated crypto wildly up and down on purpose in order to whipsaw as many as possible with the knowledge that most will get screwed by it and thus beg government for "help". Each time the government "helps", the people lose even if we the sheeple cannot see it.
By the way, I just checked Google and I could find no prior use of the made up word "cryptonite" used in the context which the title of this post used it. So I am officially taking credit for having coined the term cryptonite as that event or condition which kills or weakens private cryptocurrencies to the point of death or uselessness.
By contrast there ARE references to cryptonite on the web, but they either have nothing to do with cryptocurrencies OR, like the Cryptonite organization, see privately run cryptocurrencies as the Kryptonite of government controlled money. I assure you, when the dust clears, the private cryptos are not going to beat big government at its own game. That's because government can just resort to executive orders which masquerade as laws, and laws are backed by men who are paid and who will happily follow orders to stop you at all costs, including that of your life, if you do not comply.
No comments:
Post a Comment