Marc Cuniberti: Bitcoin bust and trust
The latest news on the market is similar to the 1950s radio disc jockey who shouted between the songs “and the hits just keep coming”.
Former Wall Street stockbrokers manage to get off the mat after being hammered down 70, 80, 90 percent or more, only to be carpeted again by another brutal sale on any given day. Merciless is the word that comes up.
Crypto fans who operate the Bitcoin universe and thought they were safe find that they are not immune to market declines either.
More than a handful of cyber coin dealers and marketers have had liquidity problems in recent weeks with some stopping or limited redemptions. The so-called “stable” coin, Terra USD, which was to remain in a locked pace with the US dollar, lost its mojo as it not only managed to maintain the link to the dollar, but almost completely collapsed. The newscasts now contain almost daily headlines that major players in the crypto universe have some very serious financial problems.
Warning several times Cyber coins were “steam”, I repeat a serious warning again today that the whole cyber universe smells of an out of control mania that will end badly. In fact, the cyber-coin phenomenon is the worst mania ever compared to previous price explosions in any other asset mania recorded in human history.
Unfortunately, this type of liquidity headline tends to only become more frequent, until the “one” headline that announces a total collapse of the asset in question or that of a major player hits the wires and causes a complete panic. .
Does not say that it will happen of course, since no one can predict how the financial markets work, but it all has a very familiar sound over it.
Since Bitcoin became known to me about 7 years ago, I did not trust it and wrote it in more than a handful of news articles and covered it on my radio program several times over the years.
The coins themselves, called tokens, are not guaranteed by any government, and the market has grown to trillions. It is estimated that over 100 billion bitcoin accounts have been lost in cyberspace due to password loss or theft. The actual numbers may never be known. Never knew anyone who lost a bank or stock account.
This brings up another issue that bothers me. I certainly do not quite understand the whole cyber coin, how it works, who operates it, and all the ins and outs of this relatively new version of electronic currency, and honestly I think few do.
With trillions in cyberspace, there are undoubtedly many, many hands in the mix, with whom we have no idea of their moral composition and honesty versus their self-interests. We also know that there are tens of thousands of very computer-savvy thieves running among them.
Without anyone being able to call or ask for help, an investor is at the mercy of this huge and complicated electronic universe. To make matters worse, it has no controls or balances that seem to be working properly, and there is little or no regulatory oversight at this time, although some are under consideration by concerned authorities.
The whole thing is downright scary for this analyst.
And finally, I’m surprised that one of the reasons proponents of Bitcoin tell me they want to invest in it is that governments can not mess with it and cyber coins have autonomous qualities. Excuse me, but Bitcoin and other cyber currencies are anything but autonomous. A dollar bill or gold coin has no memory, that is, what it was used for is forever unknown to the next holder. Look at a dollar and tell me what it bought. Ditto with gold and silver coins. But when cyber coins are in cyberspace, they always maintain an overview of where and when they moved. This is the ultimate in a tracking story if governments want to establish themselves more in the cyber universe. That the anti-government and conspiracy public flocks to this anti-cash asset where the record keeping is airtight and written in stone forever, is to me more than confusing.
“Look at the markets so you do not need it.”
This article expresses the opinion of Marc Cuniberti and is not intended as an investment advice, nor does it represent the opinion of any bank, investment firm or RIA, nor this media outlet, its employees, members or guarantors. Mr. Cuniberti holds a BA in Economics with honors, 1979, SDSU and California Insurance License # 0L34249. His website is moneymanagementradio.com, and was recently named the best financial advisor in Nevada County. 530-559-1214
