Why Bitcoin, Dogecoin, and Etherium Crashed Today

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What happened

Cryptocurrencies are under attack on Thursday – and that was internal work. Yesterday on Twitter, Dogecoin co-creator Jackson Palmer launched a broad attack on cryptocurrencies in general, ridiculing the entire industry as “right-wing hypercapitalist technology” that “is controlled by a powerful cartel of wealthy personalities “.

In 9.45am of trading, the prices of several of the biggest names in cryptocurrency tumble:

Image source: Getty Images.

So what

And that was just the tip of the iceberg. In a 10-part tweet, Palmer explained why he really hates crypto. Here are some highlights:

The main goal of cryptocurrency (he says) “is to amplify the wealth of its supporters through a combination of tax evasion, reduced regulatory oversight, and artificially enforced scarcity.” Far from being decentralized (a central selling point), cryptocurrency is today “linked to the existing centralized financial system. [its proponents] supposedly intended to replace. The prices of Bitcoin, Ethereum, Dogecoin and the like are not set fairly by the market forces of supply and demand, but manipulated by “bought influencers and paid media”.

And in general, the whole business is downright “shady” and reflects “the worst aspects of today’s capitalist system (eg corruption, fraud, inequality)”. Here, read the whole rant for yourself:

I am often asked if I will “go back to cryptocurrency” or if I will start sharing my thoughts on the subject regularly. My answer is a wholehearted ‘no’, but to avoid repeating myself, I think it might be worthwhile to briefly explain why here …

Jackson Palmer (@ummjackson) July 14, 2021 And now

Is Jackson Right or Wrong About Crypto Corruption? Maybe Wall Street insiders know it, but I don’t. What I do know is that Palmer’s broadside has just given powerful ammunition to the forces working to impose new cryptocurrency regulations.

Example: Later Wednesday night, after the publication of Palmer’s tweet thread, CNBC reported that the IRS is “determined to crack down on tax fraud” and determined to get “a share of the action” by taking more large share of cryptocurrency investors. ‘profits.

“New data analysis tools” are deployed and letters sent to taxpayers suspected of profiting from cryptocurrency and not reporting it. And if that doesn’t work, efforts are underway to “subpoena centralized crypto exchanges to obtain information on non-compliant US taxpayers.” The IRS can even require companies to report directly to it on any cryptocurrency transaction valued at more than $ 10,000.

The IRS is warning crypto investors to take all of this “very seriously when reviewing their tax returns.” Today’s falling prices on Bitcoin, Ethereum, and Dogecoin suggest they are taking this advice to heart.

This article represents the opinion of the writer, who may disagree with the official recommendation position of a premium Motley Fool consulting service. Were motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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