Former head of the US SEC Office of Internet Enforcement, John Reed Stark, compared all digital collectibles to the weirdest mania of the 1970s and highlighted some of the promises that cryptocurrency has failed to deliver.
Six failures of cryptocurrency and NFTs, pointed out by John Reed Stark
Non-fungible tokens will be remembered as “pet rocks on steroids,” and the rest of the fungible and non-fungible digital assets are headed for the same status, says Bitcoin (BTC) skeptic John Reed Stark. He published another anti-crypto rant on X today, September 21, 2023.
It’s official: NFTs will go down in history as Pet rocks on steroids (and Crypto is on track to do the same)
Stick a fork in the NFT marketplace and it’s dead. Remember when NFTs sold for millions of dollars? 95% of digital collectibles are probably worthless now, less…
— John Reed Stark (@JohnReedStark) September 21, 2023
Ninety-five percent of digital collectibles became worthless in this bear market, as their aggregate capitalization metrics fell to zero values. The average price of NFTs outside the top collections is between $5 and $10, Stark says.
To some extent, the cryptocurrency segment has a lot in common with NFTs. Cryptocurrency failed as an investment due to regulatory uncertainty and the many opportunities for manipulation.
Also, the narratives of ‘store of value’ and ‘currency’ are being ruined: risks, volatility and taxes remain too high for people interested in using crypto for everyday payments and cross-border money transfers.
Likewise, crypto has failed to become the panacea for the unbanked, the former official admits.
‘Scams, deception and fraud’ are in the DNA of crypto
Last but not least, cryptocurrency cannot be used as a hedge against market instability at a time of price declines. It is still too far away from a ‘blockchain revolution’, Stark concludes.
As such, affinity fraud is the one area in which the cryptocurrency ecosystem has been successful, in Stark’s words:
This is one of the main proclaimed benefits of crypto, namely that crypto is a revolutionary equalizer for the unbanked and will solve historical problems of financial inclusion. And it also turns out to be categorically false (…) Grief, deceit and fraud are not only common and routine in the crypto ecosystem – they are modus operandi and inherent criminal characteristics that are deeply rooted in the DNA of the crypto ecosystem.
As previously reported by U.Today, a seasoned financial expert has recommended that all cryptocurrency users lose their assets and leave exchange platforms by June 2023.