‘Crypto is not real, it has no intrinsic value’ said former SEC Chief John Reed Stark
In a recent tweet, John Stark took a jibe at cryptocurrency by calling it not real. He further wrote that the asset has no intrinsic value and is based on the shared belief of people. His remarks haven’t been received well by the crypto community.
“Crypto is not real. Like the platinum coins in EverQuest, it has no intrinsic value and is untethered to anything but the shared belief by many people that it is actually worth something.” Time to stop the hustle. https://t.co/Ab6hXxZ576— John Reed Stark (@JohnReedStark) January 3, 2023
John Reed Stark was the founding chief of SEC office (Security and Exchange Commission) of internet enforcement established in 1998. Under his leadership, the team identified and brought down securities fraud committed on the web.
He strongly believes that cryptocurrencies & blockchain together are the new waves of fraud on the internet after the dot-com era. The scammers are using the technology to dupe users.
John shared the article which compared cryptocurrencies with platinum coins in the famous EverQuest game. Platinum coins were the in-game currency used by the players to buy/sell or trade in-game items with no intrinsic value in the real world.
Unlike stocks, crypto doesn’t pay dividends. Unlike bonds, crypto fails to offer a stable interest of return. Also, you cannot buy a loaf of bread by using cryptocurrency making it an unfavourable medium of exchange.
The article gave the example of Tesla Motors which bought Bitcoin during the bull market but now has sold off 90% of the crypto reserve. Bitcoin isn’t a hedge against inflation since it’s losing value in the down market.
His tweet received unwelcoming responses from the crypto holders & the community. Meanwhile, Stark has joined the network of crypto critics along with other renowned personalities and recently stated that the bankrupt FTX exchange wasn’t regulated.
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Paras is a blockchain writer & video creator at Katoch Tubes. In his free time, he loves watching space exploration documentaries & Hollywood movies.