Insana: The pied pipers of cryptocurrency are leading investors to their doom
20 May 2021
If it is not already patently obvious, and has been for a couple years, it would seem we have entertained the Crazy Town section of Crypto-Land.
We have jumped the shark, crossed the Rubicon. We are over our skis and out of our minds.
A couple days ago, so-called investing legend David Portnoy, held an “emergency news conference” to reveal his latest cryptocurrency purchase.
After teasing his followers with a variety of choices, Portnoy revealed that he had purchased $40,000 worth of “safemoon,” a “currency” for which he had no explanation and no idea as to whether it was a Ponzi scheme or a legitimate token. And he bought, if my math is correct, about five billion of them.
At the time of the announcement, safemoon was priced at $.00000817. This morning it was quoted at $.00000679.
That’s five zeroes before you get to an actual number.
Late Wednesday, Twitter was all aflutter with the minting of yet another token called “CluCoin.”
I have no Clu what it is, who’s behind it or what it represents.
Within hours of being minted, launched or foisted upon an unsuspecting public, not only was it “trending,” its market value hit $125 million in a matter of hours. It’s probably worth more now.
It’s being billed as a “hyper deflationary token with a smart staking system.” Are you kidding me? I’ve been covering money and markets for 37 years as of next month, and I have absolutely no idea what that means.
Meanwhile, the mercurial Mr. Musk has purchased bitcoin through Tesla, accepted it as payment for a vehicle, and entirely reversed his views on bitcoin in a matter of a month, leading the poster child of cryptocurrencies to have its price cut in half from its peak of $65,000 to as low as $30,000 yesterday and back to $40,000 today.
There was also his barking about dogecoin, which hit 74 cents the afternoon before his appearance on “Saturday Night Live” and dropped as low as nearly 30 cents Wednesday.
I pity the poor folks who have listened to these crypto criers, whose midnight calls have likely cost them countless dollars and sense.
Imagine if the dollar were as volatile as the crypto coins.
We’d be shopping hour to hour to avoid paying too much, or too little, for whatever goods or services we sought to buy.
Like any other bubble in financial, or speculative assets, be they tulips, pet rocks or cryptocurrencies, this is already inflicting pain on the investing public and the craze probably isn’t even over yet.
Dear reader, please come back to your senses. If you didn’t get in early, you’re getting in late. You’re the bag holder.
These pied pipers of play money are walking you to the water’s edge. They will stop before falling into the water.
You may not.
If you have profits, take them and go back home. If you have losses, cut them.
If you haven’t yet played, stay home, stay safe and be well.
—Ron Insana is a CNBC contributor and a senior advisor at Schroders.
Become a smarter investor with CNBC Pro.
Get stock picks, analyst calls, exclusive interviews and access to CNBC TV.
Sign up to start a free trial today.