Predicting looming social and political catastrophes is a shady business, because most of the exciting things in history did not happen predictably. You can try to draw historical parallels based on broad economic or cultural trends. In America, in 2022, we have a fierce and escalating culture war along with a massive asset price bubble fueled by two years of stimulus money, all underpinned by an incredibly fragile, pandemic-ridden real economy. If you thought the Angry White Men were scary during the Trump years, just wait for the crypto bubble to pop.
Let’s think about this through. The basis of all that is happening now is a kind of late capitalist nihilistic politics purely fueled by culture wars – an almost primitive escape from rationality driven by half a century of rising inequality and a crumbling belief in ineffective public institutions. The American Dream is dead: Children no longer do better than their parents. The dream of a single-income family is over. In its place, the economy of temporary jobs, crushed student debt, the death of unions, and generalized fragility arose. The rich are unimaginably richer, and everyone is spinning their wheels. The Republican response has been culture wars, rather than an actual redistribution of wealth. This was effective, ironically, because the kind of health institutions that would prevent culture war politics from being so powerful are the same ones that fade away. Technological changes and the fragmentation of the mainstream media have intensified our division into warring political camps, identity-based tribes further radicalizing electoral politics, which in turn are radicalizing them in an unvirtuous cycle.
This is the soil of America today. It sprouts in the spring 2020It was an epidemic. The economy collapsed for a while, panic set in, and then there was a lot of government stimulus money, which staved off another Great Depression. he is good, it is good. However, the effect of this is that there is much more money in America than there was before. This money has flowed into every type of asset — stocks, real estate, you name it. The enormity of these bubbles fuels strange bubbles, the kind of bubbles that occur when people desperately search for salvation. flourish “Meme stocks like GameStop rose and then fell, and up and down stock charts stand as stark illustrations of the fact that it’s impossible for pump-and-dump schemes to replace a functional social safety net. Even more important is the advent of cryptocurrency (and to a lesser extent, NFTs, temporary online artwork whose value is now close to that of the entire traditional American art market). Cryptocurrency is now worth trillions of dollars. All of this value is based not on some underlying benefit, but rather on the idea that there will always be someone else who will come and pay you more than you spend on your cryptocurrency. This will end badly.
They are called crypto “Currencies”, but they are clearly not currencies. Their value fluctuates so much that they are a useful medium of exchange. So what are they? They are collectibles, pure speculative objects with zero intrinsic value. If you buy a stock, you own part of a business; if you buy a house, even If the price goes down, you still have a house. If you buy Bitcoin, you only have ownership of a portion of the computer code that can do absolutely nothing for you except to the extent that it can cause someone else to pay money for it. In the midst of an obsession. And, as we are now, the price of these fictitious assets tends to go up, because the collective feeling is that prices will go up.When that sentiment changes – whether due to fear or some event causing crypto holders to need to cash in – the price will drop. This underlying dynamic is more than a billion times over in financial history, often with assets that contain much more substance than cryptocurrencies.
Cryptocurrencies, like meme stocks, are a poor alternative to the American dream. A functional state would end electoral manipulation, pass campaign finance reform, end disruption, abolish the undemocratic US Senate, tax great wealth, institute public health care, and build a social safety net to ensure no one slips into our extremely wealthy country. The financial life is cracked and ruined. But this is not the American way. The American way is to encourage the very few lucky super-rich, reward them as heroes, and find a way to imitate them, even though such a thing is mathematically impossible. Instead of socialism, we gave people cryptocurrency. They buy cryptocurrencies, for the most part, not because of lofty beliefs in the technical future, but because they believe it is a way to get rich quick for a low entry price. Crypto is just a recent lottery ticket. But while lottery tickets cost you little at a time, cryptocurrency will balloon to the moon and then hit rock bottom in an even more devastating way. Perhaps the most bitter irony is that while ordinary people flock to cryptocurrency because they believe it is a land of perfect opportunities for the little man to make money, it is in fact largely controlled by a small cartel of rich investors. Just like anything else.
The cryptocurrency crash is bound to happen for the same reason that all Ponzi schemes eventually collapsed: there are no unlimited new people willing to pay ever-increasing prices for the things you currently own. The most interesting question is not whether many small investors will lose a lot of money in their crypto investments, but what will happen when they do?
Here’s what will happen when hundreds of thousands of young investors are decimated by the cryptocurrency crash: They will become radicalized. This won’t be tested as a mere drop in prices, because crypto represents so much more than a simple investment for its staunch adherents – it’s a way out of the American trap. It represents the presence of opportunity, the potential for economic mobility, and the validation of the idea that you, as a regular hard-working person without connections, can go from bottom to top, thanks to your smart choices. When this myth is shattered, disappointment with the American system will ensue. Unfortunately, given the realities of the moment, these newly frustrated, extremist, angry, and broken people are more likely to convert to fascism than socialism.
Crypto, a group of online tokens that are essentially worthless, is almost entirely backed up by legend. Its value proposition is so nebulous that when it melts, almost any narrative can be crafted to reasonably explain it. It was the Fed! the government! Leftists who hate contracting! It was the dark and devious forces of the Dark Profound State! Anything will do. The introductions will force those who have put their faith in cryptocurrencies as a good alternative to the American dream — a crowd of Barstool Sports readers, tech liberals, and the types of people who used to buy Alex Jones’ silver bullion before they switched to Bitcoin. The heavily coded evangelical population is veering toward a sort of liberal, anti-government, new-age right-wing, and when they see their financial dreams evaporate, they will likely set their sights on getting revenge on the things they already despise. The broad impact will lead to a large number of angry, bitter, disappointed and desperate people who have indulged in culture wars not to turn towards working class solidarity, and instead turn towards hatred.
So, if you want to entertain yourself during these end times, consider how much of the timing of the cryptocurrency crash might ultimately affect the very existence of American democracy itself. If the accident occurred, for example, six months before 2024 The presidential election, it may be enough fuel to bring Donald Trump or one of his aides back to the White House and to further poison the national conversation with anger and revenge. Fun thing to speculate on.
The details of these changes, of course, are unpredictable. But I feel safe to say that when history looks back in hindsight, it will see cryptocurrency as a giant bubble – as capitalism always does – that wiped out the finances of tons of little people who could not afford to perish, leaving the rich mostly intact, All because he was able to convince ordinary people to believe that this time was different. The illusion that deliverance from capitalism can be found in a new, smarter capitalism is incredibly tempting and always wrong. Let’s hope we get out of it before it’s too late.