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The crypto hype continues, but you have to ask yourself: can the lure of fast money control your financial decisions?
The other day I received a sales flyer for some Bitcoin packaged exchange with my grocery order. This was news to me because, to my knowledge, Bitcoin advertising has not reached a level where brochures are inserted into grocery products. The sales flyer featured an AI-generated illustration of a young man running to catch a bus in 2050, while nostalgically thinking, “Kash, papa ne 2024 me Bitcoin liya hota.” The back of the brochure featured a Bitcoin price chart, along with the message “Bitcoin prices rose after each Bitcoin halving.” As financial advertising Come on, it doesn’t get simpler than that. However, as readers understand, the reality of Bitcoin and other cryptocurrencies is much more complicated and murky than this marketing material suggests. The promised increases in value are attractive, but cryptoThe volatile nature of the planet weighs on it. Such pamphlets ignore the fact that the sector is full of unpredictable events. regulatory changes, cybersecurity threats and market manipulation schemes. Additionally, crypto’s lack of intrinsic value and complete reliance on speculative behavior hardly makes it the type of asset you can rely on to guarantee your children won’t have to use public transport in 2050.
However, the strangest thing about this sales pitch is not what it says, but what it doesn’t say. Unlike any other financial product, there is no disclaimer on the brochure. In this country, as in any well-regulated market, no one can advertise or promote a financial product without thorough legal review and warnings. Take mutual funds. Whether someone has invested in such a fund or not, they will have heard or read: “Mutual funds are subject to market risks.’ Yet Bitcoin can be advertised without any warning or caveat. All that pamphlet said was “Government of India is registered”.
In the wake of last year’s FTX debacle, I was actually happy with the lack of an official manager. cryptocurrency regulation in India.
To a certain extent, one could argue that cryptography should remain unregulated, allowing individuals who engage in it to face the consequences of their actions. They should have the autonomy to risk financial ruin on their own terms. However, contrary to what one might have hoped, the FTX scandal did not prove to be the death knell for crypto. This suggests that the cryptocurrency market could become a permanent part of the global financial landscape. The FTX incident showed that a crypto company can attract billions of dollars. investors around the world, completely mismanaging it, and yet fundamentally not undermining the fundamentals of cryptocurrency. The profit potential is simply too great and easily achievable.
We’ve reached a point where everyone thinks cryptocurrency is a legitimate asset class. Although there may be some regulatory hurdles, these will eventually be overcome. As the sales leaflet claims, a further rise in value is inevitable, which will result in a substantial increase in price. wealth of those who own cryptocurrencies. With each wave, a new wave of unsuspecting savers around the world will put their financial well-being at risk. With each wave, there will be a new batch of potential victims. Any speculative asset that can randomly double or halve is well-equipped to be exploited to attract new entrants. Clearly, this is a role that Bitcoin is now playing. Unfortunately, this may continue in the near future. The question we need to answer as individual investors is: what are we going to do about it? How are we going to save ourselves from this madness? Ultimately, it is up to each individual to carefully navigate this dangerous terrain. The incessant lure of quick money cannot be the principle that guides our financial decisions. There are those who will understand this and those who will not. Which group will you be in? The author is CEO, SEARCH FOR VALUE