Low blow for poor crypto investors
‘Man Who Lost Everything In Crypto Just Wishes Several Thousand More People Had Warned Him.’ That headline in The Onion – a sort of US Waterford Whispers – is an example of online reaction to a collapse this week in the market for crypto currencies.
Crypto (digital money that isn’t backed by central banks) grew from zilch into a $3 trillion market by last November – only to fall even faster.
The whole market is now worth $1.2 trillion just five months later. About a trillion dollars – three times Ireland’s GDP – has been wiped off since March. Many crypto investors deserve sympathy – they’ve been let down by lack of regulatory protections. Traditional finance companies and authorities seem to mainly either ignore crypto, issue the occasional warning that gets ignored, or join in the hype. Jamie Dimon, boss of JPMorgan Chase, one of the world’s biggest banks, dissed crypto as having ‘no intrinsic value’. Meanwhile, his bank made loads of money flogging it to eager investors.
Rival bank Goldman Sachs told investors Bitcoin could hit $100,000 with the rather important rider, ‘if it became the new gold’. Well, of course, anything could soar in value - if it
becomes ‘the new gold’!
One banker even remarked unsympathetically that the effective ‘evaporation’ of a trillion dollars worth of crypto will help deflate the world’s inflationary bubble caused by central banks printing too much money. That’s a bit ironic on two counts:
1. This is not what crypto buffs had in mind when they used the selling point that it’s a ‘hedge against inflation’ – now a running joke.
2. They also slammed traditional central banks for printing too much money, which was true. Only now crypto buyers are helping to fix that problem – by seeing so much of their own money ‘evaporate’.
The EU is beginning moves to protect crypto buyers. That’s a long overdue move that should be welcomed by crypto enthusiasts and critics alike.
Swaggering ‘crypto bros’ like Tesla boss Elon Musk don’t improve sympathy for those unfortunates suffering losses this week. Musk can afford to drop hundreds of millions on his company’s $1.5bn Bitcoin buy in February last year.
However, that’s put in the shade by Tesla’s woes. Shares in tech giants like Amazon and Tesla are down over 30% this year – as is Apple, which recently lost its place as the world’s biggest company.
But Tesla fell more than most as its eccentric CEO embroiled himself in a controversial – and some say overpriced – bid to buy Twitter. On Friday Musk tweeted that his Twitter bid was being put on hold due to concerns over its fake accounts.
But wasn’t his desire to clean up Twitter, including fake accounts, part of his rationale for the attempted takeover? Could unease among Tesla shareholders and the fall in his own wealth have something to do with getting cold feet over Twitter as well perhaps?
One way you could save money right now is claiming back €1,082 in a tax rebate. Yep, that’s how much most people get back when they look into potential rebates, according to Irish Tax Rebates. This week the firm released a guide to one of the most neglected tax savings – flat-rate expenses, pre-approved by Revenue for jobs or professions that can add up to thousands of euros – if you bother to claim. For instance, nurses can claim €1,172 on the last four years and engineers €530. See irishtaxrebates.ie or revenue.ie