Crypto was born in the aftermath of the last financial crisis and was designed to mitigate the damage of the next one. The technological innovation called blockchain — and cryptocurrency as a specific application of blockchain — is a financial innovation, a unique product of our digital age, and a triumph of capitalism. As such, it is the province of economists, who almost to an individual, don’t seem to understand it.
As much as we enjoy bashing economists who don’t get crypto, their opinions are understandable because they’re arguing from firmly established positions that are based on economic principles upon which our economies have functioned for decades and even centuries. We understand that economists (especially the tenured university kind) have a hard time accepting that their age-old fiat paradigm is doomed. They’ll learn the hard way.
But as an asset class, cryptocurrencies are also the domain of traders and investors. As such, traditional financial media outlets like The Motley Fool, CNBC, and Bloomberg have an obligation to at least acknowledge cryptocurrencies. They often do little more than that, and, to say the least, they don’t always paint crypto in the best light.
We talk about it a lot in our daily Crypto Dime when we’re deconstructing the FUD so often produced by the mainstream news outlets and traditional financial publications. It’s a pet peeve of ours that these pundits spend their time criticizing and belittling crypto or repeating the academic drivel of the closed-minded economists. It might seem we’re being a little sensitive or thin-skinned about it, but we have a very specific beef with them. What they’re doing borders on malfeasance.
Whether they’re providing financial information free to the public or to their own paid
subscribers, financial publishers ought to give the best possible information or at least make an honest effort to do that. We suspect they haven’t been. They have all been aware of and publicly commenting on cryptocurrencies for many years now. But as Bitcoin’s price has risen through three orders of magnitude, they’ve said the same things again and again through every part of the market cycle to dissuade people from investing in crypto. One would think financial professionals would have learned something watching an asset increase in value 100,000%. But if you’d listened only to them, you would have missed out on the single best investment class of the last 10 years, likely a lot longer.
The problem is that they all have a financial incentive not to be completely honest. They’re all participating in the grand illusion that the current financial system works just fine, that it always has, and any alternative to that must be flawed or fraud. Maintaining the current failing financial system is in their best interests. It keeps them in control and, as an unfortunate byproduct, keeps the wealth out of the hands of the masses. Their job is to sell you products based on the mechanisms that power the current illusion. They don’t want to convince you to buy something unless they can profit from it. Since they haven’t yet figured out how to profit from promoting crypto, they deny it to you in the only ways they know how.
There are only two possibilities here. That they have no idea what they’re doing or that they know exactly what they’re doing.
It’s hard to believe that they have no idea what they’re doing, but it is possible. They’ve been watching and covering crypto for years, have seen it rise in value, yet they remain oblivious to its value as an investment class or future financial system? Perhaps they are so lost in the illusion they are weaving that they can’t bring themselves to question its fundamentals or just can’t accept the idea of change.
But the other possibility is worse. They do understand crypto and anticipate the same seismic shift in the future financial landscape that we do. They are privately profiting as we are but are deliberately not sharing that understanding with their audience, setting themselves up as future billionaires at the expense of their own customers.
Neither possibility is comforting. The reality is probably a mixture of the two. The decision makers recognize what’s coming, but the talking heads are too comfortable to care. Either way, traditional financial publishers are doing an epic disservice to their customers and the public, those who could most benefit from crypto.
Average investors rely on traditional financial publishers for investing info they don’t have the time or know-how to acquire otherwise. They need investing and financial guidance, and they’re wise enough to seek it out. Yet the publishers are failing utterly to supply them with information that may be critically important in the next few years and could potentially make them profit in the last few. These are the people who will be most vulnerable in the next financial crisis, not the super-rich or the poor. The super-rich are financially agile and diversified enough to weather any financial storm. The poor have never benefited from the traditional financial system, so they won’t notice much difference in the next crisis. People with 401Ks and IRAs and those who might be relying on a Social Security system that may not be there when they need it in 10 or 20 years have the most to lose in the next financial crisis.
The FUD put out by traditional financial publications may seem funny or insignificant to them now. But it deters and delays many people from participating early in what we expect to be the greatest wealth transfer of our age. Some will learn from other sources and participate. Some will learn just in time and avoid financial calamity. Others will only buy when they have no other choice. Those who could most benefit from crypto would be the last to benefit from it if we left it up to the mainstream financial media. We’ll remember that.