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How bitcoin fell to earth: The whole crypto system is being exposed as a multi-trillion dollar pyramid scheme, says ALEX BRUMMER

The flight from the Bahamas and first court appearance for FTX founder Sam Bankman-Fried provides a dramatic book-ending for the cryptocurrency bubble.

It follows guilty pleas to similar fraud charges by two associates. The whole crypto system is being exposed as a multi-trillion dollar pyramid scheme.

Firms who bought into the myth propped up their balance sheets by swapping crypto-backed instruments, allowing them to assume ever more leverage.

It is remarkable that, even as the whole structure goes down, the crypto missionaries are still preaching the virtues.

Bitcoin has fallen a long way from the dizzy heights of $69,000 hit in November 2021, valuing the market at $3trillion. That is more than the size of the UK’s total GDP.

Yet it is still at an astronomic level, close to $17,000, even after a cascade of insolvencies and exposure of an edifice built on lies, alleged fraud and money laundering.

Those who have drunk the Kool-Aid are finding it hard to leave the cult. As recently as this week the backers of the ethereum blockchain were trumpeting how upgrades, creating a more energy-efficient architecture, meant the appetite for crypto assets would return in 2023.

The enormous energy consumption involved in ‘mining’ crypto has been a huge downer for those fixated on climate change.

To believe that it will be fine next year is sheer, unadulterated delusion.

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7 thoughts on “How bitcoin fell to earth: The whole crypto system is being exposed as a multi-trillion dollar pyramid scheme, says ALEX BRUMMER”

  1. Once the fed issues it’s own digital currency Bitcoin,gold and all other sources of currency with be forced to be converted or be worthless.

  2. Crypto is rat poison and should be avoided . It was packaged as an independent currency that would not fluctuate based on geo political issues. That has shown to not be the case. I would proceed with caution for 2023.

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