I invested in crypto but I’m glad it’s crashed

I’d be lying if I said I wasn’t enjoying it, just a tiny bit. OK, fine. A lot. Watching the cryptocurrency house of cards folding one by one. The alleged “digital gold” of Bitcoin falling two-thirds in value. Watching a 30-year-old gamer turn crypto billionaire turn fugitive from justice. Watching dubious cryptocurrencies like TerraUSD and Luna evaporating, leaving millions with tokens no one wants to buy any more. Watching this extraordinary bubble of overconfidence fart itself sadly to a flaccid end.

Right, right. I hear it. People are suffering. People bet their savings or their houses on a popular lie: the line always goes up. There will only ever be 21 million Bitcoin. Buy now. Get in early. Hold on.

Sam Bankman-Fried, co-founder of collapsed crypto exchange FTX.Credit: Bloomberg

For years, I’d felt like I was the mad one. Friends had got in early and profited enormously. For years, I’d had to hear about how the blockchain was the future of finance. About how Bitcoin was the new store of value. I felt glad they’d lucked out – but wholly unconvinced of everything else. No one ever seemed to buy anything with these currencies of the future. They bought and sat on it, waiting for others to buy in and pump the price up.

Reader, I was weak. I dabbled. I bought $5000 of Bitcoin before the pandemic. I did it for selfish reasons: so I would never have to talk about Bitcoin again. My novel use-case for the blockchain: block all mentions of crypto. It worked beautifully. It was like being able to tell charity muggers I’d already donated, like being able to tell the how-to-vote wielding pack I’d already voted. I was safe.

And yes, I made money during my brief flirtation. Other people bought in, and the line went up. Then I read more about crypto. About the ridiculous energy usage used by miners. About the people who’d been stung by an early price collapse. I sold, and pocketed $2000. Thanks, stranger.

The whole experience was like entering the underworld. For the supposed future of currency, it was ridiculously hard to navigate. Buying it was a pain. Turning my money back into faithful dollars was concerningly hard. This was not the future as you usually picture it, all gleaming cities and straitlaced, beaming people exuding good health. This was more of a furtive masturbatory future, made by geek men for geek men.

The miracle, to me, was that they’d managed to sell this future to everyone else. People at the pub were talking about it. Non-technical people. Normies. Give us your real money and we’ll give you some of our freshly minted internet tokens, which can only ever go up in value. And it worked! Maybe we should give up space colonies and settle for using make-believe money to buy badly drawn JPEGs. Maybe we never deserved that bright future dreamed of in the 20th century.

But sweet baby Jesus, the scammers. First Bitcoin, then the shitcoin copycats. Hundreds of dodgy tokens, run by blatant scammers to draw in the unwary. Dumb money pours in, pumps up the price and then the scammer dumps and runs. You can even use them to make your crypto marketplace look solvent.

Every generation seems to need to find out the hard way. Why are financial regulations there? Oh, that’s right – because when they weren’t there, banks made out like thieves and silver-tongued gentlemen sold us snake oil. We long to believe charismatic operators who draw us such beautiful imaginary worlds.

In the 1980s, nerds were the butt of most jokes in high school movies. Then the nerds got rich IRL and people stopped laughing. Then the nerds took over. Coder kings, platform wizards, data behemoths. And the nerds kept winning until Big Tech was bigger than almost any other Big Industry. And the nerds came to believe their own hype. They came to believe that people really would put on headsets and become cartoon VR bodies in the metaverse.

They came to believe they were above all laws. That you could buy Twitter on a whim and make it into your own personal platform for people to laugh at your bad jokes. They came to believe they could make their own money and that it would gain value because we would believe it had value, just as humans had used cowrie shells or stone wheels or tokens for currency before. They would lead us boldly into this libertarian space, free from government intervention or oversight, and there, they would sell us bullshit and we would buy it. And we did. For a time.

They came pretty close. It was only recently crypto companies were sponsoring stadiums. Making deals with the AFL. Running ads at the Superbowl. Going mainstream. Then the price of Bitcoin started to fall, and kept falling. In May, the Terra/Luna cryptocurrencies plunged to almost zero, wiping out billions. June took out crypto hedge fund Three Arrows Capital. July took out crypto lender Celsius. August saw the price of Bitcoin fall under $US22,000. The crypto market fell more than $US2 trillion.

And now the crowning glory, the fall of Sam Bankman-Fried, the 30-year-old co-founder of crypto exchange FTX who went from a nobody to being touted as the likely contender for the world’s first trillionaire in only a couple of years. His origin story is instructive. SBF, as he’s known, wanted to help the world. To do that, he had to get rich and quickly, so he could begin dishing out the largesse. And as we all know, crypto is the place to get rich quick.

Soon, SBF was reportedly living in happy polyamory with 10 of his closest friends in the Bahamas, doling out donations to US politicians and charitable causes, and playing a lot of video games. Now, he’s famous for losing an extraordinary amount of money in under a week – from $26 billion or so to, well, zero.

You’ve got to admit. It’s more than a little bit funny. It’s the greatest gift to comedy in decades. So perhaps there is merit to crypto after all. Maybe the tokens we were buying were for front-row tickets to this remarkable show, a remake of a very old story: Rich man, poor man, beggar man, thief.

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