I must admit I’ve been rooting for the crypto market to crash and burn. Not because I never invested in it and was resentful to see so many people get rich from it (though there were moments). But because I don't understand it, what value it serves or what problem it solves.
So I spent the last 12 years assuming — and hoping — that crypto would go away. And now it might. Or at least, it might become a smaller part of the financial market. But now I'm worried. After a decade of drawing in investors, minting new millionaires and billionaires, and inspiring passion for investing among a new tech-savvy generation, I fear the consequences of it crashing and burning. Investors are in danger of learning the wrong lessons about risk.
I'd feel a little guilty for rooting against crypto if its fall was the thing that tips the economy into a bad recession. But it doesn't seem that FTX.com or even the entire crypto market poses a systematic risk — by design, crypto is supposed to lie outside the traditional financial markets. When there’s a big failure in the bond market it's bad because it touches everything and the whole market melts down. That’s not the case with crypto. But there are still reasons to worry about what the FTX situation portends for investors.
