The crypto crash of the past 10 days has attracted the usual examples of schadenfreude, opprobrium, and bad takes from the mainstream media writers who can finally say ‘we told you so’. Never mind the fact that the crypto space put on 2,600% while they were saying it was all going to zero. So how have they dealt with the crash of the past week or so? How do you think.
As we have explored before, while there are many cryptocurrencies that have little to back their valuation, even calling the most vapour of vapourware projects Ponzi schemes is inaccurate, mainly because there is no guaranteed rate of interest and no ‘robbing Peter to pay Paul’ scenario. There have been instances where exchanges have certainly been doing that, but those are few and far between in comparison.
Of course, the Guardian is famous for its anti-crypto stance, having been so far wrong at almost every single turn when it comes to what will happen next in the market. So forgive us if we take this ‘collapse’ motif with a pinch of salt.
New Statesman writer James Bloodworth at least gets something right when he says that cryptocurrency is not all a Ponzi scheme because of the reasons outlined above, but he does go rogue with his assessment of celebrity endorsement:
While Pierce, Mayweather, and Kardashian were indeed nothing more than paid shills, Musk hasn’t been paid anything by Bitcoin and Dogecoin (because there is no one to pay him). Of course he benefits by the value of Bitcoin going up, but recent filings show that Tesla hasn’t sold the bitcoin it bought back in early 2021 so he hasn’t benefited in any way. We may not be the biggest fans of Musk and his antics, but we can’t accuse him of being a paid shill.
However, like Ponzi schemes, the tulip bulb boom and bust has actually very little similarity to the crypto space – Tulip Mania was the preserve of a small selection of wealthy individuals who hiked up the price of tulip futures, which had very little to do with the underlying asset. Also, those who sold their Tulip futures lost fictional cash – if you hold Bitcoin through a bear market, history has shown that you always have the chance to sell higher.
Time writer Eswad Prasad took a more circumspect view of the crash, suggesting that it might bring about a brighter future for crypto once the winter has thawed:
Finally we have someone with a more balanced and forward-thinking view of the markets. Indeed, crypto could emerge in a couple of years as a more regulated and therefore more respected beast, potentially with a Bitcoin ETF under its arm. Whether it actually does or not, at least someone in the mainstream media world is looking behind the valuations.
Used teabags…tulip bubble…enough said.
The Evening Standard offers a glimmer of hope, suggesting that something better might be built from the ashes:
This is a very vague assessment, but it does at least show that not everyone in the mainstream media space is so bitter at missing out that they revel in the fact it has all burnt to the ground and will never recover.