r/technology – $280 billion wiped off crypto market as bitcoin falls below $40,000 for first time in 14 weeks


It’s not a pyramid scheme at all but it certainly has ponzi elements to it.

The value of crypto is almost completely dependent on demand. People will argue that the stock market works the same way and demand pushes stock prices up, which is true, but stock prices are (should be…but that’s another issue altogether) a direct reflection of the performance of a business. If a business grows 30% in a year, their stock value does too.

Crypto generally doesn’t have that reflection because it generally doesn’t have a business backing it’s performance. All you have is the price being reflected by its trading quantities.

People argue that futures works like this, but even futures are representative of actual products and the availability of those products are what influence the futures price.

Crypto currencies literally lose value when people get bored and stop engaging. That’s typical of a Ponzi scheme. No new investors? The price tanks. Again, people will argue that the same happens to traditional stocks, but it’s a completely different level with crypto. It’s about having a genuine business’ performance reflecting the stock price.

Crypto doesn’t have that.


It’s not a pyramid scheme at all but it certainly has ponzi elements to it.

The value of crypto is almost completely dependent on demand. People will argue that the stock market works the same way and demand pushes stock prices up, which is true, but stock prices are (should be…but that’s another issue altogether) a direct reflection of the performance of a business. If a business grows 30% in a year, their stock value does too.

Crypto generally doesn’t have that reflection because it generally doesn’t have a business backing it’s performance. All you have is the price being reflected by its trading quantities.

People argue that futures works like this, but even futures are representative of actual products and the availability of those products are what influence the futures price.

Crypto currencies literally lose value when people get bored and stop engaging. That’s typical of a Ponzi scheme. No new investors? The price tanks. Again, people will argue that the same happens to traditional stocks, but it’s a completely different level with crypto. It’s about having a genuine business’ performance reflecting the stock price.

Crypto doesn’t have that.

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