Laissez le bon temps rouler

How did you like that action?

Everyone get their money’s worth? Yesterday certainly proved J.P. Morgan’s posit, “The market will go up and it will go down.”

As a point drop the DOW saw the biggest ever drop. As a percentage, not so much. If you bought equities in ’18, you took a hit, but only if you sold into the sell off. By holding on, it’s only paper losses. For those who bought into the market last year, you’re still up.

UNLESS, you were one of those believers in the fast buck cryptocurrencies path to instant wealth.

Bad news on that front.

As Bitcoin Bubble Loses Air, Frauds and Flaws Rise to Surface

You did not have to be a technophobe to worry that the virtual-currency boom of the past year papered over plenty of problems.

The scale of those problems is starting to become clear as digital tokens have slid more than 50 percent in value from their peaks in early January, with steep drops on Monday pushing the value of Bitcoin specifically below $7,000.

Hackers draining funds from online exchanges. Ponzi schemes. Government regulators unable to keep up with the rise of so-called cryptocurrencies. Signs of trouble have appeared at nearly every level of the industry, from the biggest exchanges to the news sites and chat rooms where the investment frenzy has been discussed.

On Tuesday, the leaders of the two main regulatory agencies in the United States that oversee the technology, the Securities and Exchange Commission and the Commodity Futures Trading Commission, are to testify before the Senate banking committee about their efforts to police virtual currency markets. In the past two weeks, both have brought major cases, but people in the young industry said regulators had barely made a dent.

Some virtual currency enthusiasts argue that the problems are no different from what has happened in other booms, like the internet bubble of the 1990s. But even true believers say the design of virtual currencies — meant to cut out middlemen and government authorities — has made bad behavior more prevalent amid this particular bubble. [snip]

A new virtual currency, Proof of Weak Hands Coin, whose creators referred to it as a Ponzi scheme on Twitter and use a pyramid as a website logo, raised $800,000 before hackers got into its systems last week and drained its funds. Another pyramid scheme, MMM, which was shut down in an earlier incarnation by the Russian government, has been revived thanks to the popularity of Bitcoin and is operating openly, with particular success in Africa.

One challenge facing regulators is that it is unclear how much of the deceptive activity they can legally control.

Some online groups openly try to manipulate the prices of digital tokens in what are known as pump-and-dump schemes. Similar schemes involving stocks are illegal, but people operating the groups recently told BuzzFeed that they did not think the same rules applied to virtual currencies.

Many schemes have been able to expand quickly because they do not use bank accounts and therefore do not have to win approval from established institutions. Instead, they are able to use virtual currency “wallets” without any approvals. And virtual currency transactions cannot be reversed like normal bank or even PayPal transfers. [snip]

It is tough enough playing in a game where there are published rules known to all players.
The first rule of gambling is never play another man’s game. The bitcoin game has no rules and it isn’t your game.

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