Insana: The pied piper of cryptocurrency are leading investors to their doom
A visual representation of digital currencies.
Yuriko Nakao | Getty Images
If it’s not already obvious, and it has been for a couple of years, we seem to have maintained the Crazy Town section of Crypto-Land.
We jumped the shark, crossed the Rubicon. We’re over our skis and crazy.
A few days ago, so-called investment legend David Portnoy held an “emergency press conference” to unveil his latest cryptocurrency purchase.
After teasing his followers in a variety of ways, Portnoy announced that he had purchased $ 40,000 worth of “Safemoon”, a “currency” for which he had no explanation and no idea whether it was a Ponzi -Program or legitimate character acted. And if my math is correct, he bought about five billion of them.
At the time of the announcement, Safemoon was priced at $ 0.00000817. This morning it was trading at $ .00000679.
That’s five zeros before you get to an actual number.
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Late Wednesday, Twitter fluttered with the minting of another token called “CluCoin”.
I have no idea what it is, who is behind it, or what it is.
Within hours of being coined, marketed, or imposed on an unsuspecting public, not only was it “trending”, its market value reached $ 125 million in a matter of hours. It’s probably worth more now.
It is billed as a “hyperdeflationary sign with an intelligent stakeout system”. Are you kidding me? I’ve covered money and markets for 37 years for the next few months and I have absolutely no idea what that means.
Meanwhile, Mercury Mr. Musk bought Bitcoin through Tesla, accepted it as payment for a vehicle, and completely reversed his views on Bitcoin within a month, causing the cryptocurrency flagship to halve its high from $ 65,000 to 30,000 USD yesterday and back to USD 40,000 today.
There was also his barking about Dogecoin, which hit 74 cents the afternoon before his appearance on Saturday Night Live and fell to nearly 30 cents on Wednesday.
I feel sorry for the poor people who listened to those crypto screams whose midnight calls probably cost them countless dollars and minds.
Imagine if the dollar were as volatile as the crypto coins.
We would shop hour after hour to avoid paying too much or too little for the goods or services we wanted to buy.
Like any other bubble in financial or speculative asset, be it tulips, pet rocks, or cryptocurrencies, this is already causing pain for the investing public and the craze is unlikely to even end.
Dear reader, please come to your senses again. If you didn’t get in early, get in late. You are the bag holder.
These pied puzzles with play money will take you to the water’s edge. They will stop before they fall into the water.
You can not.
When you have winnings take them and go back home. When you have losses, cut them.
If you haven’t played before, stay home, stay safe, and be healthy.
—Ron Insana is a CNBC employee and Senior Advisor at Schroders.
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