They seem to be everywhere. Hipsters who made a lot of money in the crypto world look like they’re living the dream now. Social media sites are full of them. There are even old-fashioned glossy magazines that are barely able to stay alive with stories that are both true and not-so-true about how to get rich in the sky.
There’s no doubt that they do. One way to make a lot of money is to get in early or to build financial structures that allow people to trade like old-style banks and brokerage houses.
As with people who like to play the pokies and people who go to the racetrack, the wins are talked about a lot, but the losses aren’t talked about as much. The chance to make a lot of money may be the same thing that draws people in. But, unlike normal gamblers, many crypto devotees have a kind of religious zeal that keeps them from seeing the world as it is.
In 2009, Bitcoin was supposed to be an alternative, independent, and truly global financial system. It was supposed to free people from the shackles of government and country.
However, it has been more than a decade since then, and the faithful still doesn’t, or won’t, see how ironic this is. It doesn’t work out that way. Instead of ousting traditional currencies, bitcoin and its 10,000 or so imitators still are priced in them.
It doesn’t matter if you’re famous or have a lot of money. People who follow the religion, even if they’re rich and famous, measure their wealth in dollars, pounds, euros, and yen.
Is There Anything Better Than Money?
The way money works are complicated and hard to understand. It is based on faith that it is backed by real money and that it can be redeemed. Even so, there are different ideas about how it works, how it is made, and how it is controlled and manipulated.
People use it as a way to trade. In most cases, it is backed by a government promise or a store of wealth like gold.
BTC was designed to be a substitute It was designed to be a safe haven among a sea of nation-based fiat currencies depreciated and diluted by governments, a system prone to financial catastrophes.
It’s costly, sluggish, and volatile, making it ineffective as a medium of trade. A car dealer who took Bitcoin for $US68,000 a fortnight ago would have lost a lot of money last week.
So, if there is one thing the pandemic proves, it has turned into a high-risk game. Instead of being a safe haven, which should rise in value during times of crisis, cryptocurrencies make the economy move faster.
Bitcoin Market Inflation
They rise when things are going well and fall when there is even a hint of trouble. Since last year, that volatility has been on steroids, making cryptocurrencies an unstable and potentially dangerous investment.
There has been a lot of growth in both the world’s stock and property markets, but in comparison, the global stock and property markets haven’t grown very much.
That’s why the well-dressed are interested. A lot of investment banks and global fund managers have been getting into crypto in the last year. Wall Street thrives on volatility. Even retail banks like the Commonwealth Bank let their customers take a risk, which is a good thing.
It’s not that novice traders can’t succeed, but when computers and algorithms are involved, that possibility soon shrinks.
Central Bank Crypto Launch
As a person who runs Australia’s Reserve Bank of Australia, Phil Lowe has no idea what crypto is. He’s about as far away from that world as you can get.
Phil Lowe, governor of the Reserve Bank of Australia, is a long way from grunge crypto. But, like many worldwide central banks, the RBA is looking at ways to incorporate cryptocurrency blockchain technology into its own operations. It’s hard to imagine a world without central banks. It is likely that any privately managed currencies or tokens will be severely controlled.
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