Buyer Beware. Even if your favorite movie star is selling
By Christine Romans, CNN Business
The best advice for investors has always been: Buyer beware.
It’s especially important in the unregulated Wild West of cryptocurrencies. The collapse of FTX, billed as an entry-level way to buy, sell and hold digital currencies, is a flashing warning sign for everyday investors caught up in the get-rich-quick aura of crypto.
The stars of this year’s Super Bowl ad-palooza were celebrities hawking crypto. Some are investors, others are simply paid to promote it.
Consider the investor heeding the tagline “Fortune Favors the Brave” as Matt Damon declared while promoting cryptocurrency exchange Crypto.com last year. A $1,000 investment in bitcoin then would be worth less than $300 today.
Investments rise and fall. That’s what makes markets. But the fact is, crypto investors are on a flying trapeze without a net.
What happened at FTX was essentially a run on the bank. But unlike the highly regulated world of banking, crypto investors’ deposits are not insured. Congress as well as banking and securities regulators are in the very early days of regulating this trillion-dollar corner of the markets.
“I think a lot more regulation is coming,” economist Paul Krugman told CNN. “If the whole enterprise makes no sense, it may not end up being highly regulated. It may just end up disappearing.”
The-CNN-Wire
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