The impending crypto market crash
I have deeply disliked crypto ever since, way back in Occupy, we at Alternative Banking had a visit from some Bitcoin evangelists who were claiming that Bitcoin and the blockchain would somehow make banking more fair and democratic.
They couldn’t explain their reasoning, though, and just tried to get us all to sign up and start harvesting coins, which at the time, probably 2012, was kind of easy. But I wouldn’t do it, on the principle that it was a useless thing of no intrinsic value, and a huge waste of energy to boot. Come back when you can get rewarded for saving energy instead of wasting it, I remember saying.
I looked at the news this morning and realized that I was interested in back then, and why I joined Occupy in the first place, has come full circle to crypto.
Namely, the idea that the government (at the time, the Obama administration) was propping up a market (the mortgage securities specifically and the stock market more generally) for political reasons, which meant that the folks who should have been out of their jobs and possibly charged with crimes were getting off with their multimillion dollar year-end bonuses.
It seemed outrageous that nobody was losing their shirt except for the victims of the whole scam, because it was political suicide to allow the markets to collapse. And this was especially true because so many people had been convinced to invest their retirement in the stock market. As pensions were replaced by stock portfolios, it became a requirement to never allow stocks to dip too low for too long. And the result was truly non-natural and perverted.
I wasn’t the only one to be outraged, of course. The Tea Party was founded on the notion that somehow the borrowers for these loans – especially folks of color, for some mysterious reason – were somehow to blame.
Well here we are, back at the apex of a bubble, this time in cryptocurrency instead of weird hyper-inflated mortgage securities. But this time it’s not just that “Americans won’t be happy” if the bubble bursts, because they were convinced to put their retirement into that bubble. This time it’s Trump and his actual family that is so heavily invested in crypto that they personally stand to lose billions of dollars if and when the bubble bursts.
Which leads me to wonder, what will they end up doing to prevent this particular bubble from bursting? I don’t know, but I’m guessing it will be really gross.
mathbabe 
Yes
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I am a Boomer who totally agrees with everything you said here. My husband fought the system his whole professional life and, consequently, we don’t have a pension to lose, we don’t own a home, and are still working in our 70s. (I went to check out Occupy and found that agitpropists were already there causing disarray.) I lament that “they” will probably find a way to make this debacle disappear too, and all the bodies will be quietly removed and burned somewhere, and your voice will not receive the attention it deserves. I wish, for your sake, I could be more optimistic. Thank you for trying!!
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Yes, 100%. This is one more aspect of the disaster that late-stage capitalism is. Part of the problem, as you point out with pensions, is that we’ve been coopted into the system by being forced to invest in the stock market. We’re all human shields. If we try to kill the system, we die with it. And that can be extended to the whole Ponzi scheme. On the one hand, we know that exponential growth on a finite planet is impossible; on the other, we rely on it for our very survival. Hard to see how it ends well.
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You are right on. It’s the same old Ponzi scam dressed up in fancy clothes. Trump is turning it into a fever dream. He and his family make fees on every transaction action so they win when it loses.
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Money tries to be a medium of exchange and a store of value. It can’t do both well. Crypto is no different from cowrie shells. People wore them as necklace beads to show how rich they were, then the world switched to gold. Crypto is useful as a medium of exchange: you convert local money to crypto, buy something, the seller converts the crypto to their local money. But this creates some demand, which raise the price of crypto, then people hoard it, which creates scarcity, which raises the price more, and pretty soon you’ve got a bubble. Then when it falls a bit there’s a rush for the exit…
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Kudos for recognizing so early that bitcoin mining = energy waste (I don’t remember hearing about it until many years later and never put two and two together). I yearn for the days when Rick Santelli CNBC rants were all we had to worry about.
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I suspect that it will not just be crypto but everything collapsing. The allure of crypto never appealed to me although a friend turned me on to it in 2010. However, what is the true value? Fine as long as you stay inside the casino with the other players but once the house declares bankruptcy a total loss. And all the mining (i.e. false extraction of energy) is a real Achilles Heal (or hell as I mistakenly misspelled).
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I can relate. I had coworkers who got into crypto – Bitcoin mining specifically – really early on, circa 2012-13. I had friends later who got into the “betting” aspect of crypto in 2016-17. I never did. I participated in Occupy and later XR after a couple of decades of deeply digging into capitalism, marketing, science, and politics. I couldn’t see how Bitcoin was ever going to fulfill the boosters’ positive promises back then, I couldn’t bring myself to personally profit while externalizing all the costs to society and the Earth. It’s hard to explain my “why” at the time except for a sense of the “ick” and immorality of it all. Behind most “number goes up” situations in the stock market over the last 50 years, there have been lost jobs, destroyed communities, trash islands, shattered politics, immiserated lives.
I can’t see the stock ticker without thinking about the “company” – the people, the inputs, the pollution (or lack thereof). Similar with Bitcoin (and now LLMs), I can’t not-think about the waste of energy, oil, water, carbon, rare earth metals. I thought that most people would eventually realize the consequences of their actions as they grew older/matured/their brains finished developing. I’ve learned in the last decade how wrong I was.
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I once joined a local teach-in after seeing neighbors’ pensions gutted while bailout checks floated upward; it felt like playing a rigged Connections Game. Today’s family-tied stakes make the incentives even murkier—and potentially uglier—when the music stops.
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So, Cathy — good to hear your take — it’s been years, hasn’t it?
What were you reading or hearing about that prompted this post?
Glen
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PS. I am now a big fan of Maurizio Lazzarato, post-Foucault and post-D&G:
https://en.wikipedia.org/wiki/Maurizio_Lazzarato
However, I’m not certain if he translates poorly, or just writes poorly, but it’s his ideas about how economic downturns and financial crises (and WAR) lead to subjectivication that repeatedly reconstitutes what he called the “indebted subject”.
And and here is your point about crypto: How each Crash doesn’t represent ‘failure’ of the financial system, but instead its successful reproduction as it filters bad debt downstream.
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