The Guardian View on Crypto's Latest Crash: It Reveals Who Pays the Price for a Failing Economy
The cryptocurrency market has experienced a significant downturn, with its capitalization falling by more than $1.2 trillion over approximately six weeks. Bitcoin briefly dropped below $90,000, declining by about one-third from its peak in October.
The Guardian argues that cryptocurrencies lack intrinsic value, as they are not backed by cash flow, a tax base, or a fiscal authority. Instead, their prices are driven primarily by market sentiment and the belief that others will continue to validate valuations.
In 2023, UK Members of Parliament urged for crypto trading to be regulated as a form of gambling, a proposal that was rejected by the then Conservative government. Britain is uniquely vulnerable to the fallout from the crypto crash due to stagnant wages, unaffordable housing, and a higher propensity for crypto investment compared to many European counterparts.
Regulators have warned that many young Britons borrow money to invest in crypto with hopes of achieving large gains. The article portrays crypto as emblematic of a 'one-shot' society—where values are tied to US policy, the Nasdaq, and the dollar system instead of traditional fundamentals.
The political right is described as promoting cryptocurrency as a form of rebellious empowerment. Donald Trump is depicted as adopting crypto as a tool of patronage, while President Biden's efforts to regulate the sector are portrayed as being undermined.
Overall, the piece contends that cryptocurrency enables the powerful to profit from the powerless through deregulation and opportunistic self-enrichment.
