Cryptocurrencies give a good scare (June 2022) but the falls do not stop. This non-payment system, or rather it is not money as it lacks some of its characteristics: means of payment or exchange, unit of account and store of value.
Cryptocurrencies are a risk all around, and an opportunity for sellers of smoke and mirrors because it is volatile, which is neither bad nor good, but a given. If you want to make money you have to take risks and volatility works in your favour. You can bet on the upside or the downside. Buy and sell in hours and win a lot…. and obviously lose.
Bitcoins were invented to circumvent government control. It is like gold online, but unlike gold, it has been attracting investors for thousands of years and although it fluctuates it is not as volatile. Gold is good for almost nothing, but it can be bought and sold anywhere in the world, is not altered by anything and therefore does not deteriorate, and is relatively easy to store although its weight is too heavy for easy transport.
Bitcoin has the same objective but can be used online. Sending it by mail… it’s code. You buy something and send the money unregistered to the other side of the world. But of course, it is an invention, and therefore you have to believe in it to use it, buy it, invest it,…
Its use, moreover, is closely linked to the obscure, to fraud, to the illegal, since it leaves no trace and this forces governments or the controllers of the world order to demonise it. This is easy because in economics, fear is part of the decision making process. Therefore, you cannot work with bitcoin (or its substitutes) without suffering the wrath of fear and greed.
The cryptocurrency crash has also put miners between a rock and a hard place. Many of them have found that the high investment they have made in equipment to mine cryptocurrencies is now only leading to losses.