The latest news in the market resembles the 1950’s radio disc jockey that shouted between songs “and the hits just keep on coming”.
Previous Wall Street darling stocks manage to get off the mat after being hammered down 70, 80, 90 percent or more, only to be carpet slammed again by another brutal sell off on any given day. Relentless is the word that comes to mind.
Crypto fans who dabble in the Bitcoin universe and thought they were safe are finding out they, too, are not immune from the markets financial beat downs.
More than a handful of cyber coin dealers and marketers have had liquidity problems in the past few weeks with some halting or limiting redemptions. The so called “stable” coin, Terra USD, which was supposed to remain in lockstep with the US dollar, lost its mojo as it not only failed to maintain its peg to the dollar, but almost completely collapsed. Now the news wires contain almost daily headlines that major players in the crypto universe are having some very serious financial issues.
Warning multiple times Cyber coins were “vapor,” I reiterate a direr warning again today that the whole cyber universe reeks of an out of control mania that will end badly. In fact, the cyber coin phenomenon is the worst mania ever when compared to previous price explosions in any other asset mania recorded in human history.
Unfortunately, these types of liquidity headlines have a tendency to become only more frequent, until the “one” headline that announces a total collapse of the asset in question or that of a major player hits the wires and causes an all-out panic wipe out.
Not saying it will happen of course, as no one can forecast the workings of financial markets, but the whole thing has a very familiar ring to it.
Since Bitcoin came to my attention about 7 years ago, I didn’t trust it and written such in more than a handful of news articles and covered it on my radio show multiple times over the years.
The coins themselves, called tokens, are not guaranteed by any government, and the market has grown into the trillions. It is estimated over 100 billion worth of bitcoin accounts have been lost in cyber space due to password loss or theft. The actual numbers may never be known. Never knew anyone who lost a bank or stock account.
This brings another issue to light that bothers the heck out of me. Truthfully I don’t fully understand the whole cyber coin thing, how it works, who runs it, and all the ins and outs of this relatively new version of electronic currency, and frankly I believe few do.
With trillions in cyberspace, no doubt there are many, many hands in the mix, of which we have no idea of their moral makeup and honesty versus their self-interests. We also know that there are tens of thousands of very computer savvy thieves running amongst them.
With no one to can call or ask for assistance, an investor is at the mercy of this vast and complicated electronic universe. Making matters worse, it has no checks or balances that apparently work right and there is little to no regulatory oversight at this time, although some is pending by concerned governments.
The whole things is downright frightening to this analyst.
And finally, I am surprised one of the reasons proponents of Bitcoin tell me they want to invest in it is that governments can’t mess with it and cyber coins autonomous qualities. Excuse me, but Bitcoin and other cyber currencies are anything but autonomous. A dollar bill or gold coin has no memory, which is to say what it was spent on is forever unknown to the next holder. Look at a dollar and tell me what is has bought. Ditto with gold and silver coins. Cyber coins however, being in cyber space, forever maintain a record of where and when it moved. This is the ultimate in a tracking history should governments wish to install themselves more into the universe of Cyber. That the anti-government and conspiracy crowd flocks to this anti-cash asset where its record keeping is airtight and written in stone forever, is to me, more than baffling.
“Watching the markets so you don’t have to.”
This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, SDSU, and California Insurance License #0L34249. His website is moneymanagementradio.com, and was recently voted Best Financial Advisor in Nevada County. 530-559-1214
