[New post] Is Cryptocurrency A Scam? A Realistic Assessment
cryptointuition posted: " Photo by Sammy Williams on Unsplash https://anchor.fm/s/5a96ee20/podcast/rss Summary Jackson Palmer recently tweeted crypto is a scam. This is my realistic assessment. --- This episode is sponsored by · Anchor: The easiest way to make a podc"
Welcome to Crypto Intuition. I would like to begin by saying that I am not a financial advisor. Anything I say should not be mistaken for financial advice. This is for entertainment purposes only.
To somewhat everyone's surprise, but only to some, who are not familiar with Jackson Palmer, the co-creator of Dogecoin,he calls crypto a scam. In his own words on Wednesday, he said on a tweet,
"After years of studying it, I believe that cryptocurrency is an inherently right-wing, hyper-capitalistic technology built primarily to amplify the wealth of its proponents through a combination of tax avoidance, diminished regulatory oversight and artificially enforced scarcity."
In short, he claims that Banks and crypto have the same problem: rich people. It is a scam to help the rich get richer. It is no surprise though that he would say something like this. Back in 2017, in the midst of the rising crypto market, he pointed out that there was something definitely wrong.
I don't totally disagree with him. But, we must take this by the grain of salt. We simply don't know if the so-called whales in the market were the first investors in the market or simply random rich people who decided to make a game of crypto. It is quite possible it is a combination of both. If per se, one of the very first investors of bitcoin and ethereum decided to sell some of their position to purchase alternative coins for cheap with new loads of value from the early investment in bitcoin and ethereum, then the small fry newer investors could not possibly compete.
The very same thing could happen with someone who's incredibly wealthy. The rich person can buy crypto for 1 million dollars. Let's say the crypto was worth 6 cents. The very same week, it climbs up to 12 cents. Well, he just doubled his money and made a quick 1 million dollars. He could sell his position at that time or he can wait it out to see if the crypto price would even get higher. He can sell if the crypto consolidates to not the buy price, but also not the high price. Let's say, it consolidates to 9 cents, 3 cents higher from the buy price, but yet 3 cents lower from the highest price. Well, that's still a 500, 000 dollar gain.
The question then becomes: buy more or sell for the 500,000 dollar profit? In simple terms, more money equals more power to manipulate and the rich have plenty of that. This is equivalent to the 1920's, an era when the stock market became a literal playground for the rich. We know this as a Pump and Dump. In the 1920's, several powerful figures like Jesse Livermore could buy and sell a bundle of shares, as his buys alone could move the share price significantly, then he would sell the stock for millions in profit.
The same is happening in the world of crypto. So, does Jackson Palmer have a point. Yes, he does. But, we can interpret this in any way we like. It is very difficult to trace the activity of whales because it is not merely just the size of the wallet. There are obvious ones, but this doesn't account for whales who have multiple wallets. In one wallet, he may not be considered a whale, but stretched over multiple wallets, he would be considered a whale indeed. Or, it could be a collaborative buy where the accumulative buying power of several people are pooled over in one wallet. There's simply no way of knowing.
Then, we have obvious ones in which we hear in the news like institutions buying hundreds of millions and even billions of certain cryptos. They, in short, should be considered a whale because quite simply the average Joe could never buy billions worth of cryptos.
This, however, should only be noted as the reality of the crypto market, so we should strategize our investment in crypto in the acceptance of such reality. If you suspect a crypto is a rug pull, don't invest in it. And, the number one thing to remember: if you can't afford it and accept the reality that you could lose all your money, then you shouldn't be in crypto.
I would like to take this moment to thank my listeners around the world. Crypto is the future and we are on the threshold of being ahead of the game. If you like my podcast, please visit anchor.fm/cryptointuition/support. Every penny goes towards research and a fund to make this podcast more heard around the world.
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