The Awful Rise Of Celebrity-Endorsed Cryptocurrency
Block-chain investments are undoubtedly a great means to participate in the global economy without having to jump through the hoops erected by the man, the idea taking advantage of a system of mining and non-centralized distributed ledgers. But that doesn't take into account the risk of inherent vulnerabilities in the market and the dreaded "rug pull."
What does all that pretentious gobbledygook mean? Watch your ass, or you will lose all your money. Crypto is still plenty shady. For every legit investment opportunity, you'll find just as many get-rich-quick schemes. You might wake up one day and realize that the pile of gold you were sitting on was really more like a plastic bin full of moldy Beanie Babies. Welcome to the era of the influencer investor.
Cryptocurrencies are a perfect scheme for scammers. Usually, they utilize a tactic called the pump and dump, hooking would-be nouveau riche with sales pitches that would make Gordon Gekko mess his pants. They promise that all you need to do is buy altcoins, making a killing for being at the right place at the right time. The lure of instant gains is promoted, only for the coin to rise in value. As this happens, the original investors carefully watch the price, then dump their entire portfolio, resulting in a cascade effect that devalues the coin faster than a Venezuelan banknote. But hey, at least you can burn the bolívar for fuel on a cold day.
Crypto fans will already know all about these risks, but for anyone else looking to jump on the bandwagon, you might want to more closely scrutinize these opportunities before throwing your hard-earned cash at them. You have to remember Gordon Gekko's story didn't turn out well. And, no, we're not referring to the bad updated sequel.
Mark Cuban is bullish on crypto. That's cool, but all that really means at the end of the day is that a business-savvy individual still can lose his shirt. Cuban's zeal for the Titan token didn't last long when the price fell from $65 all the way down to an unfathomable $0.000000024 in one day.
While it's secretly pleasurable to watch rich people lose their money in silly ways, they can afford to laugh it off. The rest of us can't burn cash for fun. The celebrity factor is the biggest selling point for some. Crypto sits at the intersection of two separate trends. Branded crypto sells. Like The Mandalorian and Squid Game? Have any extra cash that you haven't already squandered on Baby Yoda dolls? Great, there's a coin for that.
Or was. The Mando token crashed down to zero after a social-media spokesperson admitted it was a con-job. It isn't even clear if he knew what the hell he was getting himself into. The Squid Coin was evidently touted as a virtual currency to be used in gaming. It wasn't. The creators of the Squid crypto debacle walked away with $3.38 million. All those suckers who invested for the right to obtain a single $2,856 Squid Coin are now left with a useless virtual token worth about a penny. It's getting hard to trust crypto gurus when there are dumpster divers with more economically-feasible financial strategies.
Radulf del Maresme/Wiki Commons
What would an investment bonanza be without a social media-based charity scam? At the heart of the trend is celebrity appeal. If you're not an NBA/reality TV fan and don't give a damn who Mark Cuban is, there are about a hundred other spokespeople you've probably already heard of. The crypto world is not particularly well-regulated because it's not understood by a lot of regulators (probably because of the memes), with crypto residing in a virtual world of international dealers. The SEC is about 10 years behind the curve on this one. Under the quirks of the United States' legal framework, Bitcoin and the tens of thousands of imitators it spawned are not technically deemed investments in the same way as stocks or bonds. By the time a Twitch streamer has hyped an altcoin, he's sold his stockpile, and the value has already plummeted just as the plan was orchestrated.
Are we saying that the crypto trend is scary? No, we're not your dad. Do what you want. But if you should happen across Soulja Boy selling an altcoin, bail. Also, Matt Damon can eat it:
Top Image: Crypto.com