Bharat will decide to ban privately held ‘currencies’. China did this on Sept 21 suddenly. Bharat will debate a ban on private crypto currency in the Winter session of Parliament 2021. El Salvador is using Bitcoin as national currency. Millions of people are ‘invested’ in various cryptos. Who is right? What should you do?
Look at some facts:
1. No viable country will hand over currency, monetary policy and stability to a privately held, volatile digital token. We will see national crypto currencies issued by governments and possibly a global one that has oversight of G20 or some such.
2. There is no underlying asset to a digital token. Shares have firms that make products and services. Bonds have borrowers and lenders. Gold and commodities have intrinsic use. Metals are valuable because we give them that value.
It would need a giant global consensus on one private crypto for it to become the global currency that some people think will happen. It will not happen. Limited circle currencies will be there and may have value in those circles. Meme coins will not replace the dollar.
3. There is a price rise today because there is demand. Cryptocurrency has been called a ‘limited supply of nothing’. The minute the demand goes away, the price crashes since there is no underlying asset. Please get this basic fact clear.
4. Crypto today is a gamble. It is like the tulip mania, the emu egg and teak plantation bubbles. Please do not think that you will get super rich by ‘investing’ in this. Gamble is a better word.
5. And for those who are climate change activists, specially the young, please count the environmental cost of crypto before you decide to get rich on its back. You have huge double standards if you pretend to be environmentally emotional but crypto traders.
My advice- Stay away. If the itch is too great, treat this like a punt, a gamble and use small amounts of your own money. Do not get your parents to break their FDs, SIPs or whatever to enter into it.
And think why a push back argument gets crypto believers so riled that they get abusive, personal and angry. Cults prevent your discerning mind to take rational decisions. Evolution got us from amoeba to having this mind. Let’s use it!
(This article has been compiled from the tweet thread of Monika Halan @monikahalan)
