Comparing crypto to the tulip bubble


Christopher Joye, reporting for livewire:

The crypto crash has been fascinating to watch and bears the hallmarks of a standard non-bank financial crisis that inevitably arises every time there is a liquidity shock. Unfortunately, it is likely to get worse.

For years this column resisted the temptation to write about the crypto craze. There is no point expressing opinions on things you don’t understand. The spell was broken last December around bitcoin’s $US69,000 peak with a warning of an impending implosion triggered by much bigger interest rate increases than the market was expecting. The warning was reiterated with gusto in January when this column argued that crypto would become the next tulip bulb bubble to burst.

Christopher Joye

I have always been a strong believer in crypto currency and the utility behind the technology. I think it is here to stay and with the development of Web3 and decentralization it will eventually become part of everyday life just like the internet.

Crypto will have it’s challenges just like the internet did and still does, but constant development of the technology will allow it to become more reliable.

From an investors point of view, Christopher Joye’s article does a good job in identifying the key differences between bank and non-bank assets and analysing risks with investing in crypto currency.

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