Blaming Crypto

We're in a recession. Time to rethink some plans.

By Darryl Weng

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Today, many investors who have lost nearly all their money in cryptocurrency funds and platforms have made it clear that cryptocurrency is not the life of the party anymore. This is undoubtedly correct, but such investors have blamed it on technology and volatility. However, as many investors fail to realize today, we are in a recession, and it certainly won’t get better quickly. Cryptocurrency is failing, because no one is at its party anymore. Unlike gold and silver which can be used as commodities, cryptocurrency has no physical use and value in a recession. In other words, cryptocurrency is a party scheme - the more people join the party, the livelier the scheme works. At this stage, cryptocurrency is an elaborate and legal Ponzi scheme, with no legitimate value, and only people to increase its value.

The current recession has shot down many inflated stocks whose companies or entities provide no physical value to the world. The stock market has been greatly affected as a whole, but the stocks hit hardest are those with no physical value.

Not only has cryptocurrency significantly been affected, but also has Lucid. Although Lucid has produced a car model, the release date was February of this year - coincidentally around the beginning of the worldwide recession. Buying cars may be a personal hobby, but many people in a recession know that cash is king, and spending on more than necessities could cause budgeting issues. Cars are great to be owned, but buying cars is another story. Lucid’s stock has fallen to around two-thirds of the price it held around February, not to mention the steep drop in May when prices fell to less than half. Had Lucid unveiled its model into the market much earlier when selling cars did have a physical value, Lucid would have a far larger customer base to preserve its purpose and role in the EV market.

The steep decline in the value of such inflated stocks has speculators worried. Will all cryptocurrencies collapse? Is Lucid going to continue to be in the bottom tier of EV competitors?

Many investors have concluded that they will never touch cryptocurrency again. However, that outlook should be altered - if cryptocurrency never recovers, I will never touch cryptocurrency again. Current conditions tell us that, with the Russian-Ukrainian War and policies aimed to target the stock market to eliminate inflation, recovery from this recession seems far away. In that time, cryptocurrencies, most of them, will most likely have stock prices near or at 0. If, in any case, cryptocurrencies make a dramatic recovery due to people exploring niche technology and hype after they’ve solved their own financial problems in the recession, crypto might be considered once again as an opportunity to gain monetary success.

As of now, the only worthy picks in the stock market are ones believed to recover well after the recession - that is, if a person can wait that long. Since companies and entities with no physical value in this current world are both near bottom and seemingly unrecoverable, investors should peel theirs eyes open to any suffering companies/entities with physical value and strike whenever they feel their financial situation allows. Cryptocurrency isn’t bad, it’s just not right during this period of time.