Irrational exuberance and the cryptoworld make quite a duo right now.
That’s according to “Last Week Tonight” host John Oliver, who turned a portion of his Sunday night program into his own warning about the dangers of cryptocurrencies and initial coin offerings.
‘I’m not saying every cryptocoin is a scam, just as I’m not saying that every blockchain company is bullshit. What I am saying is in a speculative mania, it can be incredibly hard to tell which companies are for real.’
More and more “normal” people are getting into cryptocurrencies despite the fact that bitcoin, for example, has dropped by half since the beginning of the year, said Oliver. The No. 1 cryptocurrency BTCUSD, >-2.53% is currently changing hands at about $9,300, a far cry from the all-time high of $19,694.68 it reached on Dec. 17.
Check out the whole segment here.
Driving investors into the market is the classic fear of missing out, or FOMO, the comedian/host said while sharing other insider language, such as HODL — basically a variation of “HOLD ALL” your cryptos, a message board misspelling that has stuck.
“The fundamental reason bitcoin has value is because people agree it has value,” said Oliver, who compared it to the craze over Beanie Babies limited-edition animals, a market that crashed spectacularly in the 1990s.
Oliver describes the myriad of coins on offer, such as Dogecoin, which has become the cryptocurrency to watch this year amid some predictions it could rise 3,000% by year’s end. It’s also seen a bit of a tumble so far this year.
Oliver also sounded an alarm on blockchain technology, which he explained allows a ledger of every bitcoin transaction to be stored not in one place but across vast numbers of computers. He zeroed in on Block.one, which has raised $1.5 billion in just nine months to invest in firms that will build services on top of the EOS blockchain. By comparison, it took Facebook FB, >-2.66% seven years to raise a billion dollars, and Uber five.
Blockchain research analyst Don Tapscott told Oliver that “blockchain is a highly-processed thing, sort of like a chicken McNugget. And if you wanted to hack, it’d be like turn a chicken McNugget back into a chicken.”
Oliver finished with a clip of a Carlos Matos imitator. Matos was an early investor in Bitconnect that in 2018 was forced to shut down its crypto exchange after its value fell from more than $2 billion to almost zero. The company had repeatedly been labeled a Ponzi scheme from some pioneers in the cryptocurrency industry.
“The crypto market is extremely volatile and insufficiently regulated. They pump and dump, they pump and dump and pump and dump,” Matos said.