{"id":6872,"date":"2022-01-24T16:51:48","date_gmt":"2022-01-24T16:51:48","guid":{"rendered":"https:\/\/newmoneyreview.com\/?p=6872"},"modified":"2022-02-16T17:31:41","modified_gmt":"2022-02-16T17:31:41","slug":"just-rubble-from-the-crypto-bubble","status":"publish","type":"post","link":"https:\/\/newmoneyreview.com\/index.php\/2022\/01\/24\/just-rubble-from-the-crypto-bubble\/","title":{"rendered":"Just rubble from the crypto bubble"},"content":{"rendered":"<p>In the latest <em>New Money Review<\/em> podcast, <a href=\"https:\/\/www.linkedin.com\/in\/martin-c-w-walker-b8a97b5\/?originalSubdomain=uk\">technologist Martin Walker<\/a> tells Paul Amery how the cryptocurrency bubble has wasted huge amounts of capital and is only one of several interconnected manias.<\/p>\n<p>By contrast with the dot.com bubble of 1999\/2000, says Walker, little of use may be left behind from the current irrational exuberance.<\/p>\n<p><a href=\"https:\/\/blubrry.com\/newmoneyreview\/83771451\/the-crypto-bubble-is-one-of-many\/\">Listen in<\/a> to hear more.<\/p>\n<p>Here are some excerpts from the podcast:<\/p>\n<p><strong>\u2018Decentralisation\u2019 in blockchain is meaningless<\/strong><\/p>\n<p>\u201cThe word \u2018decentralisation\u2019 in the fintech and blockchain world is a very confusing term. It\u2019s turned into an excuse to avoid accountability for running businesses and financial infrastructure.\u201d<\/p>\n<p><strong>What is bitcoin?<\/strong><\/p>\n<p>\u201cBitcoin is a rather bizarre payments infrastructure that uses a private currency. It has nothing to do with any of the problems that we saw in the 2008 financial crisis.\u201d<\/p>\n<blockquote><p>\u201cI don\u2019t see that happening until you\u2019ve had a really major crash, where a lot of ordinary people have lost their money\u201d<\/p><\/blockquote>\n<p><strong>Regulators struggle<\/strong><\/p>\n<p>\u201cIt\u2019s frustrating on many levels that regulation always seems to be a long way behind the curve. Someone used the expression: \u2018The regulators tidy up the bodies, rather than stopping people getting killed\u2019.\u201d<\/p>\n<p>\u201cBut you can\u2019t just put things at the door of regulators. They are always on the back foot when innovation occurs. And they can only do what\u2019s determined by the law. There\u2019s a responsibility on politicians and governments to look at what\u2019s going on. When you have things bubbling away and potentially causing problems the regulators need to have the appropriate powers.\u201d<\/p>\n<p>\u201cThere\u2019s a degree of reluctance by many regulators to be seen as anti-innovation. That\u2019s one of the things I really find disturbing about the current age. The number one duty of the regulator should be to protect the public and the financial sector.\u201d<\/p>\n<p><strong>The crypto lobby is powerful<\/strong><\/p>\n<p>\u201cThe crypto lobby has become so rich and so powerful that you\u2019ve got senators, congressmen, MPs and even whole countries brought in.\u201d<\/p>\n<p><strong>New rules will follow the crash<\/strong><\/p>\n<p>\u201cTo get things under proper control you need some degree of international cooperation. But I don\u2019t see that happening until you\u2019ve had a really major crash, where a lot of ordinary people have lost their money.\u201d<\/p>\n<p><strong>Conflicts of interest in cryptocurrency<\/strong><\/p>\n<p>\u201cThere are so many conflicts of interest [in cryptocurrency]. In the traditional financial markets, an exchange can\u2019t margin finance its own customers. A traditional exchange does not take trading positions against its customers. You have to have a level of operational resilience. But in the crypto markets, if prices go the wrong way, all the exchanges mysteriously switch off.\u201d<\/p>\n<p><strong>Tether is propped up by crypto insiders<\/strong><\/p>\n<blockquote><p>\u201cIt\u2019s in the interests of a small group of very rich people to maintain this illusion\u201d<\/p><\/blockquote>\n<p>\u201cThe biggest weak point in the cryptocurrency ecosystem is stablecoins, notably Tether. It\u2019s essentially a major bank and payments company that has no real financial regulation. I find it quite bizarre that if you compare Tether to its predecessors, like Liberty Reserve and E-Gold, in the past there were criminal prosecutions of those running these unregulated quasi-banks.\u201d<\/p>\n<p>\u201cThere\u2019s a relatively [small] number of players in big crypto who really control this industry: the big exchanges, Tether, the mining pools and large investors. There\u2019s no reason for a tether token to be worth a dollar. But it\u2019s in the interests of a small group of very rich people to maintain this illusion.\u201d<\/p>\n<p><strong>Many bubbles will burst together<\/strong><\/p>\n<p>\u201cWhat\u2019s different between now and the dot.com boom is that now we have a bubble of bubbles. There\u2019s the fintech bubble, the crypto bubble, a meme stock bubble, there\u2019s a real estate bubble, an electric vehicle bubble. And there are degrees of interconnection between them. It\u2019s just mind-blowing to consider how this might play out.\u201d<\/p>\n<p>\u201cWho would think that you\u2019d have the electric vehicle bubble connected with the crypto bubble. And we do, thanks to Elon Musk.\u201d<\/p>\n<p>\u201cThere\u2019s been a massive misallocation of capital. That money has just been wasted.\u201d<\/p>\n<p><em><a href=\"http:\/\/eepurl.com\/du6eTr\">Sign up here<\/a> for the New Money Review newsletter<\/em><\/p>\n<p><em><a href=\"https:\/\/blubrry.com\/newmoneyreview\/\">Click here<\/a> for a full list of episodes of the New Money Review podcast: the future of money in 30 minutes<\/em><\/p>\n<p><span style=\"text-decoration: underline;\">Related content from <em>New Money Review<\/em><\/span><\/p>\n<p><a href=\"https:\/\/newmoneyreview.com\/index.php\/2021\/10\/05\/fighting-the-crypto-scammers\/\">Fighting the crypto scammers<\/a><\/p>\n<p><a href=\"https:\/\/newmoneyreview.com\/index.php\/2021\/08\/04\/did-binance-cover-up-may-19-liquidations\/\">Did Binance cover up May 19 liquidations?<\/a><\/p>\n<p><a href=\"https:\/\/newmoneyreview.com\/index.php\/2020\/12\/10\/to-be-human-is-to-deceive\/\">To be human is to deceive<\/a><\/p>\n<p><a href=\"https:\/\/newmoneyreview.com\/index.php\/2021\/05\/05\/a-cryptocurrency-sceptic-speaks-out\/\">A cryptocurrency sceptic speaks out<\/a><\/p>\n<p><a href=\"https:\/\/newmoneyreview.com\/index.php\/2021\/12\/15\/coinbase-kraken-etoro-censured-for-uk-crypto-ads\/\">Coinbase, Kraken, eToro censured for UK crypto ads<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In the latest New Money Review podcast, technologist Martin Walker tells Paul Amery how the cryptocurrency bubble has wasted huge amounts of capital and is only one of several interconnected [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":6873,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1013,1012,1053,1014,1011],"tags":[],"class_list":{"0":"post-6872","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-account","8":"category-exchange","9":"category-featured-1","10":"category-payment","11":"category-value"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.3 - 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