Financial TimesFinancial Times

Crypto’s turbulence teaches hard, but not new, lessons

16 Jun 2022 · 2 min read

Editor's Note

The crypto crash has severely impacted the lives of many, for the worst. The FT argues that the lessons to be learned are age-old: if the investment looks too good to be true, it probably is.

Fortune favours the brave, so one crypto exchange, crypto.com, exhorted in a commercial fronted by basketball’s LeBron James. It was part of a crypto advertising blitz during February’s Super Bowl, when the industry splashed out on celebrity-endorsed segments that would reach more than 200mn viewers. Crypto truly arrived in the mainstream. Four months later, so too have heavy losses, as the war in Ukraine, creeping inflation and general market jitters have tamed animal spirits.

This week alone, a big crypto exchange, Binance, briefly halted bitcoin withdrawals, and Celsius, a lending platform, blocked redemptions. Meanwhile crypto.com, perhaps not feeling as brave as it did, announced job cuts, as did a listed rival, Coinbase. The value of bitcoin temporarily dipped below its “realised price” of $20,000 from its November high of $68,000 — meaning the average buyer has lost money.

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