100 Million Newcomers Think Of Crypto As An Investment - Change Their Mind

Lately, we keep reading how some estimates express hundreds of millions entered crypto in 2021. Numbers that probably influencers have no data to back them, but we can perhaps accept them for now.

The question is why perhaps 10% of Americans and EU households decided to invest in crypto, and what they know or are willing to do with cryptocurrencies.

So far, most investors don't use cryptocurrencies on-chain. Some parked their crypto to shady custodians lending out billions to funds that eventually short these assets to the ground.

Meanwhile, most don't understand the dangers of using centralized exchanges and trusted third parties as wallets, which is the issue crypto intends to eliminate.

What Can Go Wrong?

The worst approach upon entering crypto is to lend out your crypto to a centralized third party.

Celsius, BlockFi, Nexus, and whatever else exists, are operating centralized banking schemes of fractional reserve lending, handing out ten times more value than the cryptocurrencies in their custody.

With extensive advertising and numerous internet shills promoting these services, they reach out to investors offering yearly interest to park their cryptocurrency on these platforms.

Greed is the ultimate downfall for investors. What does greed mean, though, and can we define it? Perhaps with this example:

Investing once by buying cryptocurrencies, and reinvesting these cryptocurrencies, to receive a yearly interest from a centralized crypto custodian.

What can go wrong here? Naively these investors promote these custodians with passion while anyone asking questions meets their ignorance and fury.

Fractional reserves in exchanges already create several issues with price suppression and manipulation of anything considered an enemy to the most powerful entities in finance. The bankers use these services to short cryptocurrencies by lending USDT from them.

Not holding the private keys but allocating financial control to trusted third parties is where everything can go wrong.

Bitcoin used to be an enemy to the dollar's hegemony, but the moment it was identified, the banking cartel dealt with it and controlled it with the use of a single private company.

DeFi is equally weak when the income stream volumes of the exchanges do not justify high APR. As a result, the price of the earned tokens will always be lower.

It is a system based on sharing profits from all the available streams of the exchange. If there is no profit, there is no APR either. Moreover, the risk increases as during a bear market prices will depreciate, so the APR if it exists, won't cover the losses. Finally, this system demands holding two cryptocurrencies in tokenized form and providing "equal" liquidity for both.

I don't want to support any token pegged to the dollar or another fiat currency. I don't feel well holding USDT, USDC, or anything else.

Not just because some of them (like USDT) are evasive, untrustworthy, and unbacked, but because these tokens are centralized, not making a difference to what fiat represents but expanding into the dollarized economy and promoting the use of fiat currencies or tokenized versions of them.

Trading is not an enemy, though, if the focus is on increasing our investment size in the cryptocurrencies we selected and have researched in depth. Still, with trading it is the exchanges that win big, not the traders.

DeFi is making trading more transparent and less controllable. Yet, the centralized exchanges have already established a position that will be difficult for DeFi to displace.

DeFi pushed Ethereum to reach an incredible market cap, and some analysts suggest Ethereum can attain the top place and overthrow Bitcoin (BTC).

Of the hundreds of millions of the current owners of cryptocurrency, though, only a tiny part wants to use crypto instead of the fiat currencies, and an even smaller part that uses cryptocurrency for payments.

Education of newcomers failed in 2020-2022 since everyone joined with a focus on how to make high APRs. The outcome was financially and mentally devastating to investors.

Tens of thousands of individuals entered the Terra Ponzi scheme that recently collapsed. Suicides occurred as well, as some of them lost millions in it and couldn't handle the loss.

The focus is more practical than what the one hundred million newcomers think it is. 

It is not to make fiat money but to transition into better money.

Fiat is once again suffering from the mismanagement of governments. The printing of trillions of dollars created hideous inflation, which today the ECB and the FED can't outsource to other economies as they did in the past.

Still, anyone can claim we have thousands of cryptocurrencies, so it doesn't matter either. It does, though, in the sense that nothing is used massively yet.

We don't have thousands of cryptocurrencies, but we have thousands of choices.

Which one works as money better today? We find a few options available.

We test these options and decide. If we anticipate a shift into digital cash from fiat cash, we should then concentrate on those cryptocurrency networks that do the job.

Easy and simple for everyone to use, instant, with low fees, but also censorship-resistant, borderless, immutable, and permissionless.

The opponent was always CBDCs. State-controlled digital currencies are the future currencies sci-fi literature envisioned, calling them "Credits", "Altairian dollars" or "Earth Yen".

The dangers of CBDCs are realistic, pointing to authoritarianism and market control.

Banks can seize bank accounts under the demands of a government, however, there is a complicated procedure that demands time and multiple involved parties. CBDCs will be governed by central banks, making such a procedure instant.

CBDCs do not provide solutions but only create more problems.

Conclusion

The fact that CBDCs are expected to dominate payments at the will of governments and financial organizations will only ensure the absolute power of governments over the populations.

Cryptocurrencies like Bitcoin Cash cover all the essentials digital cash demands offering a solution to the cost of operating a monetary system.

Yet, it is the people that will decide. 

We still only watch discussions about prices, leverage, and investing, and only a limited time is allocated to fundamentals.

BTC lost its global money features in 2015 after a successful corporate takeover attempt by Blockstream.

Bitcoin Cash which is the opposition was suppressed from the news and still managed to attract some attention but hasn't yet reached out to millions of people.

Perhaps the price action and even the fiat profit can help bring more people in and gradually educate them on the fundamentals.

There is always hope, but not with the current top crypto influencers, unless they gradually adjust their message.

• Cover Photo: by " Robynne Hu" on  Unsplash (modified)

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