Get to know crypto, its steady rise, scandals and future

As Americans continue to learn more about the different sides of the arguably little-understood world of cryptocurrency, scandals involving trading exchanges and banking systems have left many people who were already skeptical of crypto feeling distrustful.

But despite what some may think, others still believe that crypto represents the future.

So what do people need to know before investing?

In February, federal prosecutors announced four more criminal charges against the founder of the crypto trading platform FTC, including conspiracy to commit bank fraud and securities fraud.

FTX was supposed to be the standard.

“FTX was probably one of the most well-known brands when it comes to cryptocurrency exchanges,” said CryptoHedge Principal and Portfolio Manager Jeremy Knopp.

A company that allowed and helped its customers to trade cryptocurrency digital assets: Bitcoin, Etherium and even Dogecoin.

“Sam Bankman-Fried had a pretty big name,” Knopp said. “He was consistently talking to a lot of different regulators, a lot of celebrities, things like that. He was widely known as a pretty smart guy in the crypto world.”

A smart guy, maybe, but was he a well-intentioned one? It has made many people wonder.

“Based on everything I’ve read, this certainly looks like a backyard scam,” said Cornell Law Professor Charles Whitehead.

“Well, I think that had a huge impact on trust, didn’t it?” Knopp added.

Trust not just one person, but a whole world that so many people know so little about.

“Now you have a lot of people who have this kind of black eye, I guess, because of FTX. But they also relate it to crypto,” Knopp said.

For most, crypto as a digital currency or digital asset is a relatively new concept. But the fact is that the idea was developed 40 years ago, and it has been in practice for the last 28.

“Well, I think people looked at it like it’s like, like a group of people out there who are just anti-government, anti-community. They just want to be able to live on their own, on their own currency,” Knopp said of that time.

But is it just ahead of its time?

Little used, little thought of until 2009, when the paper that introduced Bitcoin, the White Paper, Bitcoin, a Peer-to-Peer Electronic Cash System, was posted on a mailing list. It opened many eyes, including Knopps, and he turned his fascination, his interest in crypto into a career as a crypto hedge fund manager.

“I started asking these questions: ‘Is it going to be long-term? What technological advantage does this provide?'” he said.

In 2009, Bitcoin changed hands for the first time in trade. But it wasn’t until a year later, when the cryptocurrency was used to make a real-world purchase. There were two pizzas, delivered for 10,000 Bitcoins.

It was a concept back then, but today these coins are worth $280 million. Expensive pies, yes, but history was made.

“It was from that, research that was really found. Wow. I don’t think I’ve ever come across a bigger potential technological innovation since the internet. Really, this is kind of the next evolution,” Knopp said.

But as in life, what goes up must come down. As we see the price of Bitcoin and other cryptocurrencies fall and the scandal surrounding them increase, it’s a market that Knopp still has a lot of faith in because, he said, it’s about much more than just currency.

“I’m more confident now than ever that these are going to be much bigger than most people expect, and they’re going to affect more and more industries than most people expect,” he added.