Cunliffe: Some lessons from the Crypto Winter | Crypto Craft

  • Cunliffe: Some lessons from the Crypto Winter

    From bankofengland.co.uk

    In recent months we have seen a dramatic bout of instability and losses in crypto markets – dubbed by some commentators as the ‘crypto-winter’. A widespread collapse of crypto-asset valuations has cascaded through the crypto ecosystem and generated a number of high-profile firm failures. The totemic indicator of the crypto winter is that Bitcoin, the signature crypto asset, has lost 70% of its value since November. Regulators, of course, have not been slow to comment. And, true to type, I want today to pull out four lessons I think we can draw from this episode: Technology does not change the underlying risks ... (full story)

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Goat
Jul 12, 2022 8:22am — Edited
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It's a problem that the BoE is using this "Winter" term, even sparingly. This is a crypto-culture term to describe a bear-market, downtrend, ebb, collapse, panty drop, etc. There's one difference, however, that makes Winter a lot more dangerous: it suggests Spring is around the corner. That may or may not be true, but calling it Winter suggests that it's definitely true. An authoritative voice like the BoE should not partake in such nonsense.

Crypto is full of this toxic optimism. Buy the dip, to the moon, one BTC is still worth one BTC, etc etc. Optimism is a positive attribute in life, but not while investing. Optimistic investors have always gone broke and today they're still going broke. They will always go broke. Financial markets are reality, so investors must be realistic to successfully participate. Optimism and pessimism will both get you in trouble. In a certain way, investing is a game of who can be the most realistic.
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Sennerd
Jul 12, 2022 5:43am
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Interesting, balanced and sensible. I'm a bit surprised.
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