Stop me if you've heard this before - cryptocurrencies are crashing again today.
Actually don't stop me, because this is only part of a bigger story.
It's not just a case of bitcoin's price falling fast. We've seen that many times before, only to see bitcoin rebound in a few months. What we're seeing today is the various "infrastructures" that underpins the cryptocurrency world failing.
Celsius Network, a major U.S. cryptocurrency lending company, froze withdrawals and transfers citing "extreme" conditions.
Binance, the world’s largest crypto exchange, also temporarily paused bitcoin withdrawals today.
If this gets only modestly worse, then all of those cryptocurrency investors are going to be locked out of their accounts, unable to turn their paper profits into cash. What's scary is that you could potentially be one of those investors and not know it.

Celsius’s website tells customers they can “borrow like a billionaire”. It has $11.8bn in assets, down from more than $24bn in December last year. In November it said it had raised $750m from investors including Caisse de dépôt et placement du Québec, one of Canada’s largest pension funds.

And those paper profits are getting thinner each day. $200 billion has vanished from the cryptocurrency market since the start of the weekend.

With #Bitcoin dropping below key support at $25K and #Ethereum below 1300, the combined market cap of nearly 20K #cryptos has broken below $1 trillion, from a record-high of $3 trillion. That's $2 trillion down, $1 trillion left to go. The last trillion will be the most painful.

— Peter Schiff (@PeterSchiff) June 13, 2022

Cryptocurrencies are taking it on the chin the hardest because they make one of the weakest cases.
For instance, bitcoin is supposed to be a currency, but it acts like a speculative investment. A currency should have reasonably stable value, rather than swinging wildly. But that’s what Bitcoin does.
Cryptocurrencies investors will probably say "Who cares? Look how much it's gone up." But that's what a speculative investment does, like DotCom stocks in 1999, or housing in 2004. No one wants to accept a currency if it's likely to drop 50% before you can unload it, even if you are confident that it will bounce back in a couple months, because that's not what you do with a currency.
And if cryptocurrencies don't function well as a currency, then what exactly gives it value? What is it's purpose?

Robert Shiller, an economics professor at Yale who won a Nobel prize for his work on bubbles, said Bitcoin is “the best example right now” of a bubble. Compared to other investments, Bitcoin looks more like a get-rich-quick scheme than a long-term, stable investment.

Plus there is the high-transaction fees, slow transactions, limited number of places you can spend them, and the unusually high number of scams associated with crypto.
Speaking of crypto scams, consider this one, which makes investing in NFTs look sane in comparison.

Also in the midst of the crash, Ethereum co-founder and figurehead Vitalik Buterin published a paper summarizing his vision for Web3. It centers around un-transferable "soulbound" tokens attached to "souls" that act as an augmented reality layer on top of social life. It's safe to say that even with nearly every crypto coin in the red, things have only begun to get truly weird.

I'm going to stop bashing crypto now because crypto is just the most obvious element of a much larger bursting tech bubble. An examination of the cryptocurrency industry is that it is being propped up by VC investors with very deep-pockets, much like the rest of the tech bubble.
Tech stocks were down 26% as of Friday, so far this year.

My favorite example of this tech bubble is Uber. Unlike crypto, Uber's business model makes sense in theory. However, the fact that it continues to lose money hand-over-fist, quarter-after-quarter, year-after-year, and yet no one bats an eye, is proof to me just how insane it is.
In the fist quarter of 2022, Uber lost another $5.9 BILLION. Despite that Uber outperformed the NASDAQ that day anyway.
In the decade that Uber has been in existence, it has piled up around $30 BILLION in debt. That's greater than the GDP of nations like Iceland and Cambodia. Yet Uber appears to be no closer to making a profit than it did five years ago.

Uber is hardly an outlier in this regard. 'Zombie' companies tripled in number over the past decade, and 2021 was the peak year for investing in money-losing zombie companies.

The entry point for the discussion is as much about the massive influx of liquidity that private companies experienced in recent times as the sudden decline in liquidity taking place now. Many start-ups have a lot of money left on the balance sheet after mega rounds in the past year. In 2021, VC funding was $620 billion, which was more than double the previous year.
...“We stopped calling it a record year for venture capital in 2021 because it didn’t even do justice to what was going on,” said Kyle Stanford, senior VC analyst at PitchBook.

Of course 2022 is the year that inflation finally forced the Fed to raise interest rates, so it could be that insanely risky investing could turn into a return to reality on a dime.