In another life time I was a Futures Trader for a U.S Investment back - Bankers Trust. We were a swashbuckling, go get em, hard trading bank. Nothing mattered but making profit from trading.

BT made its reputation by going short in the 87 market crash. I worked with some of the smartest, most switched on and genuine people i’ve ever worked with. Eventually we were bought by Deutsche Bank and although I hadnt realised it at the time, those swashbuckling days of trading were close to over.

I also lived through the the tech boom and bust - the ‘dot.com bubble’ - and advised our clients to go short, the institutions did, the retail investors didn’t. And what we are seeing at the moment in crypto is exactly the same - and its about to crash.

And as happened in the Dot com bubble, the vast majority of retail crypto investors will lose everything

We are entering the period where Crypto is about to be ‘found out’, as we go into a higher rate environment, and easy money backs off, the crash in crypto will happen - and its a good thing. But why do I say this? As a believer in Web 3.0, Blockchain and crypto as a medium of exchange (for some things)

Here are my reasons

1) Most crypto currencies have no value: Currencies get their value for being a medium of exchange or enabling utility in their ecosystem: Almost all crypto currencies really have no utility in the underlying ecosystem and are not in demand as a store of value so they will tank (apart form the big ones such as Eth and BitCoin.

2) If the rights attached to NFTs they are worthless: You can’t escape gravity. If there are no valuable rights attached to an NFT contract (Token) then the token as no value.

3) Its not and never will be Fiat as it isn’t backed by anything: Fiat is backed by government tax receipts, crypto is not. When people say its ‘backed by an algorithm’ then what they are saying makes no sense as a fiat argument. All the ‘algorithm’ does is update a ledger (the blockchain) to show who owns what token - its not ‘backing’ anything.

You believe in the medium of exchange of Fiat because its backed income Gov Tax receipts. Now if there was Token that was backed by gov tax receipts, and it didn’t involve gas fees, and it didn’t take ages to update the blockchain THEN we could compare - but it doesn’t, and it won’t, so we can’t. Don’t get me wrong, the blockchain, the secure nature of decentalized finance are all incredibly valuable and will be integrated into our system over time and revolutionise it, but they wont replace fiat, they will improve it.

4) If the business behind the token is worthless, so is the token: When I was advising everyone to go short the tech boom and advising all my mates to sell all their tech stocks before the tech bubble, I remember a very smart guy at Bankers Trust that saying I simply didnt understand the tech businesses I was selling short. I asked him to explain them - he couldn’t. It’s the same in Crypto now. If you don’t understand what the business does that the tokens support then don’t buy it.

The way Tik Tok ‘crypto investors’ talk about the tokens they pimp is ludicrous. They have no understanding of the business underlining it, they talk about technical trading terms but have no skill, it takes years to be a good trader, they are scammers taking your money.

When the crash happens they will disappear - as will all of their investors money .

However, Blockchain and Crypto will be the future:

The tech behind Web 3.0 etc will dominate the future, and there will be winners, and just like the tech boom, although 99% of the companies disappeared, the 5 biggest companies in the world came out of the tech crash, it will be the same here.

Tech like Etherium and good businesses where the tokens have valuable rights attached will thrive, but the crash will happen first, with is a good thing as it will clear the decks of all the rubbish, get rid of the Tik Tok investor advisor fools and help us get on with building a solid Web 3.0 world.

And cheers to that - and then lest wait for the next Tulip bulb boom and have the same conversation agian :)

Dudley Nevill-Spencer