Ranting about Dogecoin and Bitcoin

Today I am talking about Dogecoin and Bitcoin. I have made videos in the past on the problems with bitcoin, and they are some of my most hated videos. So I was not going to make this video today, because I know I am going to get a lot of hate comments, and people are going to try and shut down my channel, but I think people need a dose of reality. I see all these videos on YouTube about Dogecoin and bitcoin, and these people are hyping up these investments and they are not telling you the risks. I am not going to tell you what you should or should not invest in. I am sure there is a reason to hold these assets in your investment portfolio. But you need to at least know the risk, and that is what we are going to talk about today. WATCH NOW

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VIDEO SUMMARY

When we talk about Dogecoin, Bitcoin, or any of these electronic currencies, we are basically talking about purchasing a currency that is not managed by any government central bank. Recently, all these currencies took a massive dive in in the markets. Here is a chart of Bitcoin over the last six months. For a six month period, this is a wildly fluctuating asset. You see it break above 60,000 at its high, and it has currently dropped almost by 50% from the high to 34,000.

The story about all these cryptocurrencies is they are competing against the US dollar. So when the US Federal Reserve prints money, like it has been doing during the pandemic, there is concern over inflation, and people buy up Bitcoin as a way to preserve the value of their assets. But just from looking at this chart, you have to acknowledge that this is a really risky way to protect the value of your assets, because the price fluctuates so much.

But the risk does not stop there. One of the reasons for the latest bitcoin crash, was statements by China. The Chinese government released a statement that said virtual currency “is not a real currency” and “should not and cannot be used as currency in the market”. I expected this. I have made videos in the past about China’s problems with their currency. Because China has done so much currency manipulation, they have to closely manage their currency and cannot allow an outside currency disrupting their markets.

But setting aside China’s issues, the real reason this tanked the market not simply that China banned crypto, but people realized how any country could do this. are. A country can simply say, “We are going to ban Crypto currencies in our country.” And the crypto market can crash. That is all it takes, is just releasing a press release, and the market loses half its value.

Now you might say, “that is just China. That is just an isolated incident.” I think you are being naïve. This can and will happen in the US as well. All the US has to do is threaten to regulate the use of Crypto, and the crypto market will crash. The reason this will happen is that Crypto is competing against the US dollar, and the US Federal Reserve will do whatever it takes to make sure the US dollar remains on top. Imagine the best case scenario for Crypto. The best case is that Crypto becomes so widely used, that it threatens the US dollar. Everyone would dump the US dollar and switch to Crypto. But in that situation, don’t you think the US would ban Crypto to keep people using the US dollar? Of course they would. And suddenly all the Crypto you are holding would be worthless.

If you are investing in Crypto, you have to realize that if your investment does well, the US government will destroy you. So if it does bad you are screwed. If it does good you are screwed.

So why am I so confident about this? Because the people in charge in the US have already been making statements about this. They are trying to warn you.

10 days ago, the Chairman of the US Federal Reserve Jerome Powell released a statement that said “To date, cryptocurrencies have not served as a convenient way to make payments, given, among other factors, their swings in value.” He then goes on to say “We think it is important that any potential [cryptocurrency] could serve as a complement to, and not a replacement of… the dollar.” So he starts off by attacking cryptocurrencies for their problems, and then emphasizes that they will not let cryptocurrencies replace the dollar.

Janet Yellen is US Treasury Secretary. This month, she was speaking at the Wallstreet Journal CEO Council Summit. She said, “I think (for) cryptocurrencies we don’t really have an adequate framework to deal with the different issues that they pose from a regulatory perspective. There are issues around money laundering, Bank Secrecy Act, use of digital currencies for illicit payments, consumer protection and the like. And while there are several agencies that arguably have some ability to address this through regulation, I frankly don’t think we have a framework in the United States that is quite up to the task of putting in place a regulatory framework that we need in the future. I think that’s a topic that’s well worth addressing.” You will notice, she uses the same approach as Jerome Powell. She starts out by attacking cryptocurrencies on their problems, and then says it is time to regulate them.

These are just two examples this month alone that show, if you are a cryptocurrency investor, the US Government is coming to get you. Now at this point, fans of cryptocurrency tend to get self-righteous and talk about the evils of central banks, and how they are printing money, causing inflation and the system needs to go away. You are right, that they are causing inflation and destroying value, but we actually want this to happen. That is the price we pay to have a stable currency. We want a currency to be managed by a Government’s central bank. What Jerome Powell and Janet Yellen are saying is correct. Cryptocurrency is too volatile to use as a practical currency. It does allow criminals to get around the banking laws. Remember the chart of Bitcoin. We don’t want this as our currency. It is all over the place. Imagine if you got a paycheck in bitcoin, and the value of your paycheck dropped by 50%. You would not be able to pay your rent. Businesses couldn’t function. The price of bread would be one price one week, and then double the price the next week for no other reason than the crypto market changed. We want to have a stable currency to have a functioning economy. That is why we except the loss of value from inflation, and why we need central banks to manage it. And when we look at history, no country on Earth so far has managed their currency better than the US, which is why the US dollar remains strong.

Let me reiterate. I am not giving you investment advice. If you think Dogecoin is going to the moon, whether you buy it or sell it is up to you. My hope is that whatever you invest it, you just understand the risks and make appropriate investment decisions.

Leave a comment down below letting me know what you think!

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Neither Zach De Gregorio or Wolves and Finance shall be liable for any damages related to information in this video. It is recommended you contact a CPA in your area for business advice.