Benzinga - Writer and producer John Oliver, on Sunday, addressed the state of cryptocurrencies like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) in his show “Last Week Tonight.“
What Happened: The focus this time was on the series of high-profile and expensive busts in the sector, with the most notable being that of FTX, a cryptocurrency exchange that collapsed at the end of last year, costing billions of dollars.
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The arrest of FTX’s billionaire founder, Sam Bankman-Fried, on charges of defrauding investors, was only the tip of the iceberg, according to Oliver, with many other dominoes falling in the crypto world.
Oliver went on to examine the collapse of three companies — Terra, Celsius, and FTX — each “founded on the promise that they would replace some part of our financial system.”
He reminded viewers that every cryptocurrency is simply something that "someone with a laptop made up," and its value is based on people’s confidence in the person or group who made it. The story for each of the three companies was one of gained confidence that was ultimately squandered.
Takes Dig At Do Kwon: Terra, launched in 2018 by South Korean entrepreneur Do Kwon, was promoted as a stable cryptocurrency with each unit supposedly always equal to one U.S. dollar, guaranteed by another cryptocurrency called Luna. Oliver likened this to someone offering to exchange your money for “blorps” – an allegedly valuable token that they created themselves and promised to always be worth $1, utilizing a “special algorithm”.
Oliver noted that the concept may sound complicated and foolish, but many people are enticed when hearing the term “special algorithm” as it creates a perception of greater knowledge and expertise.
Oliver’s Conclusion: “The truth is, in a financial system where the only real currency is confidence, scammers are going to thrive […] We should recognize that right now, the main thing you can really do with crypto is gamble with more crypto. This is all still a casino.”
Price Action: At the time of writing, ETH was trading at $1,823, down 2.14% in the last 24 hours, according to Benzinga Pro.
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