The cryptocurrency scam is taking no prisoners
The evidence of the existence of the "greater fool" is overwhelming
The recent collapse of FTX has the cryptocurrency world apologists dismissing the failure as an isolated incident arising from fraud and mismanagement. There is ample evidence of fraud and mismanagement emerging from the FTX failure, but it is by no means an isolated incident. The failure rate of cryptocurrency exchanges is reportedly about 45% according to a 2021 updated report by Coindesk. In most cases, investors lost everything.
Cathie Wood sees cryptocurrencies as the future and has become well-known promoting her ARK Fund for its portfolio of “next generation” investments. She recently claimed Bitcoin would hit $1 million per coin by 2030, according to CNN.
Ms. Wood often makes outrageous claims pretending to be a technology Nostradamus, and did well in the past with high performing postions in TSLA, ZOOM and ROKU, for example. Hers is a great story, often repeated. So how has that worked out for investors in 2022?
Ms. Wood claims her funds have outperformed the S&P 500 in the past (and it seems they have from time to time) but a deeper dive into her track record shows a few stains on her copy book - apparently she has seen dramatic losses now and then and just abandons investors and starts another fund under another name, or at least that is what one source reports. Her current fund, the ARKK ETF, has lost about 60% of its value year to date 2022 in spite of a 7.7% spike yesterday.
Investors may have taken a bath in the past year, but Ms. Wood gets .75% of the funds $7.6 billion in assets under management (about $57 million) so Ms. Wood won’t need a tag day anytime soon. Of course, not all ARKK’s holdings are in the cryptocurrency space - only Coinbase makes the top ten list and comprises a 4.1% holding. If Ms. Wood believes Bitcoin is going to move from about $16,000 today to $1 million in 8 years you might expect to find a lot more exposure to Bitcoin in the ARKK fund. But you don’t. Outrageous claims are pure marketing, a bit like the old days of Barnum and Bailey.
Reality is setting in not only for Ms. Wood (who has enough sense to limit her cryptocurrency exposure despite her bluster, but makes up for that with high risk investments that are tanking in other industries) but also for the entire cryptocurrency space. Bitcoin itself has declined in trading price from a high close to $60,000 per coin to about $16,000 now and billions of investors who bought into the story have lost their life savings. Dozens of cryptocurrencies now exist - the barriers to entry are close to nil - and the whole sector is destroying wealth faster than a socialist government. It seems every day another cryptocurrency exchange files for bankruptcy or stops redemptions and withdrawals. Names like Zilliqa, Dogecoin, SpaceBit, PayCoin, GetGems, Squid Game, BoggedFinance, Ekta, One Coin, and Ethereum’s DAO are all now relics in history books, and exchanges such as Voyager, Celsius and BlockFi have joined FTX in bankruptcy courts, with once stolid pension funds like Ontario Teachers Pension Plan and Caisse de Depot et Placement left holding the bag to the the tune of about $250 million of pensioners’ money.
It would be fun to have Sothebey’s or Christie’s auction off the last tulip bulb known to exist from the great Dutch tulip bubble which burst in 1637 as a reminder to investors that chasing dreams can turn into nightmares if the dreams lack common sense.
thanks for the update ... scary stuff
Along with Jason Kenney, and Daniele Smith?
https://calgary.ctvnews.ca/alberta-sets-sights-on-cryptocurrency-wild-west-aims-to-attract-maverick-companies-1.5836593
https://twitter.com/abdaniellesmith/status/1516791961037852672