Is Cryptocurrency Just a Big Pyramid Scheme?
![pyramid-bitcoin Is Cryptocurrency Just a Big Pyramid Scheme](https://groco.com/wp-content/uploads/2019/05/pyramid-bitcoin.jpg)
Is Cryptocurrency Just a Big Pyramid Scheme?
So what’s new in the world of cryptocurrency? That all depends on the day. In fact, sometimes things can change hourly with digital currencies. Just do a quick Google search and chances are you’ll find all kinds of stories about crypto. For example, we just did that very thing and here are few headlines we found:
Will A US Company Ever Issue Its Own Cryptocurrency?
Don’t buy your bitcoin from a place that could disappear overnight
The ‘Crypto Bubble’ Is About More Than Market Mania
Bitcoin rallies above $9,000 after positive G-20 cryptocurrency meeting
As you can see, the world of cryptocurrency is a big deal right now. But is it all really legit? Is cryptocurrency a real thing, or is it just a big scam? Although people all over the world are clamoring to get into the crypto game, there are some people who still think the whole thing is bogus.
Where Have All the Crypto Offerings Gone?
According to some, if you take a closer look at the entire crypto industry and not just the big players, like Bitcoin and Ripple, there are some alarming signs. For example, according to a recent report, 50 percent of all initial coin offerings have already died or been killed off. Furthermore, many of the digital coins still in circulation are obvious scams.
Additionally, if you pay attention to the massive swings in the market, it will likely leave you with at least some suspension. Just look at Bitcoin as an example. This popular crypto coin has experienced huge swings, going from more than $20,000 back down to less than $10,000 in a matter of days. Ripple is another example. When the crypto market crashed in January Ripple co-founder Chris Larsen lost $44 billion of his net worth, leaving him with about $15 billion.
Multi-Level Marketing Traps
Also known as multi-level marketing schemes, pyramid schemes work by recruiting people and then offering them incentives to recruit additional new people. The more people that buy in at the bottom level, the more money the people at the top make. If you don’t recruit new people you don’t really make much money. In many cases, the scheme eventually crashes and those at the bottom are left with nothing, while those at the top make piles of money.
Pyramid Scheme Similarities
So is this what is happening in the crypto world? It might not be as obvious as a pyramid scheme but there are some similarities. The people who bought into digital currencies have a keen interest in recruiting others to continue purchasing these currencies. The more people that get involved and buy into crypto, the higher prices will go. That means those at the top, the early buyers, will become even wealthier. In fact, 1,000 people own 40 percent of the entire Bitcoin market. That means relatively very few people are getting rich from Bitcoin.
All Investment Has Risk
So, are Bitcoin and other cryptocurrencies just one giant pyramid scheme? While it is possible, no one can really say for sure. Whether or not the cryptocurrency world will lead to untold riches for all who buy in, or will eventually crumble to the ground leaving most owners in the dust, remains to be seen. As with any investment, do your homework and use caution. Because, by nature, all investments come with risk.
We hope you found this article about “Is Cryptocurrency Just a Big Pyramid Scheme?” helpful. If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page or our website at www.GROCO.com. Unfortunately, we no longer give advice to other tax professionals gratis.
To receive our free newsletter, contact us here.
Subscribe to our YouTube Channel for more updates.
Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
GROCO.com is a proud sponsor of The American Dreams Show.
The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.
Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.
The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.
They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..
American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:
Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…
MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness. It’s mission statement:
In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.
Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.
Simple Strategies for Avoiding an IRS Audit
Simple Strategies for Avoiding an IRS Audit sounds easy, but is it? Yes! Are you one of those individuals where the fear of an IRS audit keeps you awake at night? Well, you are not alone. It is one of life’s more complex fears. Never fun going into a room with someone that wants money…
Strategies for Representing Yourself in an IRS Audit
Strategies for Representing Yourself in an IRS Audit Have you been selected by the IRS for an audit? It’s OK. Relax; you can get through this. Although we advise you to never try to go through an audit by yourself, if you really like a challenge and would rather do it by yourself, there are…
U.S. Government Could Lose Billions Due to Fewer Audits
U.S. Government Could Lose Billions Due to Fewer Audits Taxpayers rejoice! There may actually be some good news about tax returns this year. The US Government could lose billions due to fewer audits. That’s because according to reports, due to reduced staff, the IRS may be forced to reduce the number of audits it would…
- « Previous
- 1
- …
- 470
- 471
- 472