Commodity Insight: Crypto Chaos AgriNews

[ad_1]

The crypto industry descended into chaos and bankruptcy. FTX cryptocurrency exchange, one of the largest in the world, collapsed within a week and filed for bankruptcy.

At its peak, it had 1 million users and was worth $36 billion just a month ago, while its owner, Sam Bankman-Fried, was worth $26 billion at the same time.

Now both are pretty much broke. And it only lasted a week.

A little over a year ago, I wrote a column on crypto markets, Decoding the Crypto Craze. Based on the mess that makes daily news, I thought I would reprint most of what I wrote at the time.

When I wrote this column, Bitcoin was trading up to $60,000, but a few weeks ago it was as low as $14,960.

A recent headline on Insider sounded: Crypto fever has gripped the markets this year, making stars of Dogecoin, Shiba Inu and Solana, investors pouring a record $8.9 billion into digital coins more than into all year 2020.

At the bottom of the article, here is the following: Shiba Inu has a market capitalization of $30.6 billion despite launching in August last year, making it the 11th largest crypto by value, while Dogecoin is two notches above, having gained 9,000% over the past 12 months, based on data from Binance.US.

I can’t remember any group of markets or investments that get as much bullish publicity as cryptocurrencies. Every day I dump market news of all kinds and I can’t count the bullish articles on cryptocurrencies.

For example, from Business Insider: A crypto investor bought around $8,000 worth of Shiba Inu coins in August 2020. Just over a year later, the $8,000 trade has turned into a value of about $5.7 billion. The Shiba Inu coin has grown over 7,000,000% since its debut in August 2020.

The only ugly cryptocurrency story I’ve seen happened a few weeks ago. From the BBC: A digital token inspired by the popular South Korean Netflix series Squid Game has lost almost all of its value as it turns out to be an apparent scam.

A few weeks ago, Squid was trading at just 1 cent. Within a week, its price had jumped to over $2,856.

But it was a scam because buyers couldn’t sell the coins they bought. Its value has now fallen by 99.99%, said cryptocurrency data website CoinMarketCap.

I hate to say it and I’ll probably get some criticism and criticism, but cryptocurrencies remind me of the biggest fool theory that goes like this, according to Investopedia: The biggest fool theory argues that prices go up because people are able to sell overpriced securities to a bigger fool, whether or not they are overvalued. That is, of course, until there are no bigger fools.

In 2013, only a handful of cryptocurrencies existed. As of this month, 7,751 are available to the public to purchase with more being created every week.

From The Hill: Securities and Exchange Commission Chairman Gary Gensler says the rapid proliferation of cryptocurrencies and related investment products is like the Wild West.

In August, Neel Kashari, president and CEO of the Federal Reserve Bank of Minneapolis, called out cryptocurrencies, describing them as frauds and coins.

Does my ramblings on cryptocurrencies mean they are not the investment to make? All I can say about cryptocurrencies, or any investment, is to follow my two main rules.

Rule 1 is: no one knows for sure what any market will do. Not sure they don’t. Rule 2 is: always use a stop.

The driving force behind the frothy crypto markets is understandably FOMO, the fear of missing out. But I remain skeptical of crypto markets and view it as similar to buying a lottery ticket.

However, I am also an old man watching a new kind of market while bobbing my head back and forth, left and right.

Now let me understand, the labor shortage is due to workers refusing low paying jobs and trading cryptocurrencies instead?

And a number of Americans have given up their full-time jobs to trade cryptocurrency for a living!

De Barrons: How long does it take to wipe out a $32 billion company, shatter trust across an entire industry, and leave a trail of destruction from Wall Street to Silicon Valley? In crypto, about a week.

From Axios: The fall of FTX threatens the existence of crypto. And from me in this Commodity Insight column: Always use a stop loss.

[ad_2]