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05-27

The Perils of Blockchain and Cryptocurrencies: A Skeptical View

As of May 28, 2025, 09:22 AM NZST, the cryptocurrency market continues to capture headlines, with events like Trump Media & Technology Group’s $2.5 billion Bitcoin investment fueling speculation about prices soaring to $120,000. However, beneath the hype, blockchain-based digital currencies, particularly Bitcoin and its peers, present a troubling landscape that warrants a bearish outlook. The market’s reliance on speculation rather than fundamental value makes it a risky venture, and here’s why investors should approach with caution.

First, the cryptocurrency market is driven more by hype than by intrinsic worth. The recent buzz around Bitcoin’s potential rise to $120,000 hinges on institutional moves like the Trump Media deal, yet this $2.5 billion injection, while significant, represents a mere drop in the global financial ocean. With a circulating supply of approximately 19 million BTC, this investment could push prices temporarily, but it lacks the backing of tangible assets or consistent cash flow that traditional investments offer. This volatility is evident in the 20% pre-market swings seen in stocks like Pinduoduo, a stark reminder of how sentiment can overshadow fundamentals.

Second, the speculative nature of cryptocurrencies fosters a gambling culture. The 290 posts on X debating Bitcoin’s future reflect a market fueled by FOMO (fear of missing out) rather than reasoned analysis. Historical patterns, such as the 2021 crash following a speculative peak, suggest that such enthusiasm often ends in sharp corrections. The promise of blockchain technology—decentralization, transparency—remains unfulfilled for most practical applications, with adoption lagging behind the hype. Instead, the market thrives on pump-and-dump schemes and influencer-driven rallies, eroding trust.

Moreover, regulatory and macroeconomic risks loom large. Governments worldwide are scrutinizing cryptocurrencies, with potential crackdowns threatening their legitimacy. A stronger U.S. dollar or rising interest rates could further dampen appetite for risky assets like Bitcoin. The Trump Media deal, tied to political branding, adds another layer of uncertainty—its success depends heavily on policy shifts, which are unpredictable.

For investors, the allure of quick gains is overshadowed by the likelihood of significant losses. Unlike stocks or bonds, cryptocurrencies lack intrinsic value or regulatory oversight, making them prone to manipulation. A bearish stance is justified: the market’s speculative bubble is likely to burst, especially if institutional interest wanes or regulatory hurdles mount. Rather than chasing the next rally, prudent investors should allocate funds to more stable assets, preserving capital against the inevitable downturn.

In conclusion, while blockchain holds theoretical promise, the current cryptocurrency market is a speculative casino with little substance. The risks outweigh the rewards, and a cautious, skeptical approach is the wisest path forward.

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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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