The cryptocurrency world is full of good sales talk – too good to be true, many times. If anyone got rich with cryptocurrency, it was because they were in the game too early and other reasons were like they probably gambled their way and even so – they scammed people.

Empty Product in the Cryptocurrency Space

Cryptocurrency is still nascent.  Real value is yet to be made.  No one has in this cryptocurrency space to date become rich by creating long-term value. Even legacy investors looking for good business model are left clueless considering the current cryptocurrency market attitude.

Profit is a kind of yield that comes with real use case.  The cryptocurrency space is filled with empty products and services with no use case potential and therefore the yield is null – and those who organized the show land up rug pulling and file for bankruptcy.

Short-Term Profits from Crypto

The average cryptocurrency investor is focusing on short-term performance. While there is an erosion of public trust with regards to the cryptocurrency market considering several crypto giants file for bankruptcy, risk takers are willing to invest with an attitude to make profits with short vesting period.  They are waiting to cash out opportunistically.  Motivating value-friendly business behaviour is becoming increasingly scarce in the cryptocurrency space.

The worse feeling is when cryptocurrency investors are not able to withdraw their coins and tokens which the cryptocurrency exchanges are holding.  Forget profits – people are having to forego their primary investment.

Turmoil in the Cryptocurrency Space

The latest showstopper for bad reasons in the cryptocurrency space is the FTX Liquidity Crisis.  It has sent shock waves in the cryptocurrency space.

The missing fortune that vanished with FTX is worth $25 billion. The funds of elite investors and retailors alike is now lost.

So, here is the long FTX Collapse story short: 

• Bankman Fried is the 30-year-old founder of the FTX exchange.
• Alameda is Bankman Fried’s crypto hedge fund.
• FTX was planning to lend billions of dollars’ worth of Customer assets to Alameda to fund risky bets.
• It obviously looks like Alameda has been quietly using FTX customer funds for trading.
• The potential misuse of the funds was not known to several employees and outside auditors.
• Of late, FTX did not have enough money to match customer withdrawals.
• FTX on November 12, 2022, Saturday stated that it was investigating to see if crypto assets were stolen
• Since FTX moved their Headquarters from Hong Kong to Bahamas in the past year, The Royal Bahamas Police Force stated, “In light of the collapse of the FTX globally and the provisional liquidation of FTX Digital Markets Ltd., a team of financial investigators from the Financial Crimes investigation Branch are working closely with the Bahamas Securities Commission to investigate if any criminal misconduct occurred.”

Reality Behind Passive Income

Passive income by simply holding crypto in the wallet is quite an interesting and convincing statement to attract investors. However, someone should be doing the job of making the money work.  The money should be invested into something that provides long-term value without which it is not possible to generate returns.  Perhaps for the investor it is passive income, but someone should have actively used the investment for some product of service with real-time utility to generate profits. When that does not happen – money giving birth to money sounds like a scam.