The following is presented as part of The Columbian’s Opinion content, which offers a point of view in order to provoke thought and debate of civic issues. Opinions represent the viewpoint of the author. Unsigned editorials represent the consensus opinion of The Columbian’s editorial board, which operates independently of the news department.
‘Fortune favors the brave” was the slogan for Crypto.com, a cryptocurrency company now laying off hundreds of workers.
Its now-famous Super Bowl ad starring Matt Damon flashed images of a mountain climber confronting a blizzard and astronauts ready for takeoff — but no explanation of what cryptocurrency is, much less its risks.
I’ve seen enough Viking videos to know that the brave who don’t think things through often end up with hatchets in their skulls. And that’s what has happened to the finances of crypto “investors” suckered by a marketing campaign that preyed on their vanity and their laziness.
The crypto ads centered on bucking authority, mocking experts and ridiculing government.
They suggest that anyone could build great wealth if they believe in crypto. “History is full of almosts,” Damon says. “Then there are others — the ones who embraced the moment.”
What was the moment? It was engaging in “decentralized finance” — “DeFi” for the hip.
Cryptocurrencies are basically complex codes that supposedly enable transactions while bypassing government-backed currency. Some sophisticated investors call it “fake internet money.”
El Salvador made cryptocurrencies legal tender. Its president, Nayib Bukele, “boasts that he manages the country’s wealth from his smartphone while naked,” reports The Economist. The country’s digital wallet is called “Chivo,” or slang for “cool.” What could possibly go wrong?
Exhortations to skirt governmental authorities ignore the reality that central banks are, actually, kind of useful. Do not confuse the crypto mess with solid payment services like Apple Pay, Google Pay or Venmo, where transactions are tied to bank accounts containing real government-backed money.
Who gets drawn into the promise of wealth without work? The usual suspects for financial cons.
Independent researchers at the University of Chicago found that the average cryptocurrency trader is under 40. Most don’t have a college degree, and just over one-third have household incomes below $60k a year.
Two-fifths of crypto traders, 44 percent, are not white, which may help explain that predatory Crypto.com ad featuring LeBron James.
“If you want to make history,” the NBA great tells a CGI version of his younger self, with fatherly tenderness, “you gotta call your own shots.” The ad ends with a chant, “We’re going to the league! We’re going to the league!”
Oh, let’s all laugh at those creaky old crypto skeptics. Another Crypto.com ad featured Larry David playing the geezer who casts doubt on history’s great innovations, starting with the caveman who invented the wheel.
But what about those cowards who kept their money in the boring stock market instead? Aren’t they suffering losses right now as stocks enter bear territory? They are, but the stock market measured by the broad S&P 500 index is down 23 percent this year. Bitcoin, the No. 1 digital asset, has lost more than 50 percent of its value over the same period.
Crypto has been likened to various investment bubbles of the past — subprime mortgages, beanie babies and long, long ago, the tulip craze in Holland. (That’s when speculators bid up tulip bulbs at prices high enough to buy a mansion in Amsterdam.)
In India, the Advertising Standards Council requires crypto ads to note that these products are unregulated and can be highly risky. They must say that “there may be no regulatory recourse for any loss from such transactions” and can’t use words like “currency” or “securities,” which are associated with regulated products.
There’s now a class-action suit against Kim Kardashian for having promoted a thing called EthereumMax last summer. Within a week, these crypto tokens lost 70 percent of their value. What can you say about people who took investment advice from Kim Kardashian?
Guess you can say they were brave.
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