Media Launches More Scare Tactics Against Cryptocurrencies
In what has been an almost automatic assumption, the mainstream business media has no shortage of animosity towards cryptocurrencies, and the financial freedom they represent. This time around, CNN Money republished a story that had misconstrued the words of Ethereum founder Vitalik Buterin to further their anti-blockchain agenda.
To maximize the “chill effect” upon the virtual markets, CNBC recently published an article entitled, “Cryptocurrencies ‘could drop to near-zero at any time,’ Ethereum founder warns.” Buterin did indeed say those words. However, that’s not the issue. My contention is in the framework of the discussion. It’s the other half of the quote that the media is not putting into proper context.
Here is Ethereum founder Buterin’s full quote, which was transmitted via Twitter:
“Reminder: cryptocurrencies are still a new and hyper-volatile asset class, and could drop to near-zero at any time. Don’t put in more money than you can afford to lose. If you’re trying to figure out where to store your life savings, traditional assets are still your safest bet.”
Clearly, Buterin wasn’t saying that ethereum, bitcoin and other cryptocurrencies would fall to zero as a price forecast, or that he suddenly doubted the sector. Rather, Buterin was merely following the standard protocol that all people involved in the financial investing sector abides by – issuing disclaimers.
Investing in cryptocurrencies is identical to all other asset classes in that risk is involved; there’s simply no way around that. In fact, the enormous profitability potential for cryptocurrencies exist because of exceptional, almost absurd risk. Buterin was just pointing out the obvious, but he was also providing a public service in that he recognizes many people take investing risks to the extreme.
However, the mainstream media takes any excuse to apply scare tactics on the digital markets. For instance, in the same article, CNBC mentions that cryptocurrencies “have recovered slightly from a severe sell-off.” Slightly? Last time I checked, bitcoin was well above $10,000 and ethereum is sitting pretty at $950.
Moreover, from the time bitcoin first hit $10,000 up to its all-time high, the average price in this time frame is $15,000. The media forgets that the rise to $20,000 took only 18 days. Thus, it’s extraordinarily unfair to compare the current bitcoin price to its peak, given that it was purely speculation driven.
If we’re being intellectually honest, we should compare bitcoin’s price now to the average price I just mentioned. Using that benchmark, we’re behind about 30% at time of writing.
Is that a steep magnitude of decline? It absolutely is, especially when compared to traditional assets. But these are not traditional assets, and therefore, require an unconventional approach to assess them properly. But definitely, scare tactics is not the correct methodology.
Agree with your assessment on the media. It seems that always want to exaggerate the news to get higher views. Rhe same happened on the way up as you could change a new channel without bitcoin being a top headline with bubble right after it. This makes the Steemit platform so important as we can freely share our ideas and discuss them from different perspectives to get our own views. I find myself spending more time on steemit than watching news lately.