Published: 3/1/2025

Cryptocurrency, or crypto for short, refers to a digital form of currency that is “supposed” to offer an alternative to regular paper currency to the masses that is not controlled/manipulated by any governments, banks, or big institutions. It was supposed to be a community-driven approach to currency, which is finite in number and can’t be created/printed at a whim (fiat currency, I am talking about you.). A noble idea soon turned speculative and a meme fest, inviting uninformed investors into something they know very little of. Let’s discuss cryptos today.

Fun fact: Fiat in Latin means " just let it be ", meaning fiat currency, if you go on its word, means "let it be money" aka, I said this is money, so it is money. Funny, right?

The origins of crypto

The start of crypto was in the year 2008 when the Americans faced the mortgage crisis, and to stabilise the economy, the government & federal bank bailed out the American banks by buying their bad risky debts. The step was drastic and controversial (we can discuss why & how some other time), but the intervention changed the image among the public that big banks could gamble public money, and when the loss starts to pile up, they can easily get bailed out by the government. This anger led to the creation of the first public-controlled currency, aka Bitcoin, with the intent to put the power of currency creation into the hands of the public (or community) and to make big banks and governments more responsible while handling money. An idea that aims to stop the popular notion that governments can get out of any economic crisis if they just print more money and pump it into the system.

Why it has become a joke now - speculations and the meme fest.

A noble idea to put the money creation power into the hands of the people, but over a period of time (post-2016-2017), cryptos went on to become speculative instead of a substitute for our fiat currency. A big bull run followed around 2016-2017 that took the bitcoin from about $800 at that time to $18000. This bull run brought new interests and scammers into the field, and we saw the creation of personally owned coins or coins created as a joke (meme) called meme coins; they were created just for fun or as a joke with no real intention to succeed or serve a utility. Naive public and crypto bros dived into the craze, and now we have a Nobel idea turned into an actual joke itself.

Statistically, the majority of meme coins have crashed and lost money for their investors. Take the recent example of Trump Coin, which got launched just before Trump took office on 20 January 2025. The coin got listed at $27, went up to $77, and now the price has gone down and touched $10. In fact, this is one of the most successful meme coins because of the Trump brand; most meme coins usually go to 0 as some insider dumps all of their coins, absorbing all the active buying orders. This makes it difficult for the rest of the coin holders to sell, as the price drops drastically while active buyers disappear.

Why I think that crypto can never replace paper currencies or become mainstream

The simple answer is Govts. The core principle behind crypto was to take the power of money creation from Govts and give it to the public (or community), which poses a serious threat to govts all around the world. No government would want to lose its most important tool in managing a financial crisis, which could possibly make them lose power. Furthermore, no government would want something that they can’t control, and hence they are either banning them totally or releasing their own controlled crypto called central bank digital currency (CBDC). Now, if governments all around the world refuse to make it a legal tender, what real utility would it have except as a speculative tool for the entertainment of the masses?

Big asset management companies have even tried to make money off this speculation by offering a crypto ETF. BlackRock, the world’s largest asset management company, launched its crypto ETF for people who want to invest in crypto. If you think a bit, you are buying a unit (ETF unit) that invests in crypto (which is itself speculative) in the hopes that it would make you good money. But the only way for you to make money is only when either someone buys that ETF unit from you or the value of that ETF unit increases because the crypto they invested in increased in value. Which means someone else wants those cryptos. While cryptos serve no real utility. This speculation will someday crash, leaving its investors high and dry (not in a good way).

Some would say, “Mayank, Is it a growing asset? What harm is there in making money?”. Well, this is true to some extent, but there are only a handful of cryptos, mainly Bitcoin & Ethereum, that have increased in value. Though they do have increased value, they don’t serve any real utility to anyone. The most one can do is buy them in the hope they would increase just due to inflation and act as a store of value, but I would argue that so can a unique art piece or a Rolex watch. Why would you want something digital that you can’t feel or used to be used as a store of value?

In the end, I would say try to stay away from crypto as much as you can. It’s my personal take on this, and instead, you could invest in real investments, some of which are stocks, mutual funds, or even fixed deposits. You can also check out my investment blog post to further read on constructive ways to invest and grow yourself.

Hope you learnt something new and sensible today. Keep tuned in and provide your feedback in the comments.

Thanks for reading till the end. :)