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The Harsh Truth About Cryptocurrency Trading And Get-Rich-Quick Schemes.

“The ponzi schemes themselves are not the real problem.”

The Root Cause of Get-Rich-Quick Schemes

You see, these get-rich-quick schemes are not the problem, but are the symptoms of a deeper and bigger problem — the real problem is that most people have practically zero investment opportunities in today’s world of finance as we know it.

This is absolutely true for countries like the Philippines, and also for most developing countries of the world. People with incomes that are enough to get by but still manage to eke out small savings are punished by inflation and rising prices of goods and services. They are frustrated, and they look at anything that can offer a way out of the rat race. I would argue that people who join ponzi schemes are quite aware of the the risks, and some even willingly participate knowing it is a scam, with the hope that they can earn a little more money before they exit at the expense of a greater, more desperate fool. It’s sad, but it is true.

These people are craving for opportunities and have worked hard to have a modest amount of capital. Problems is, most don’t qualify for a bank loan to start a business.They’re ignored by every financial advisor, every stock broker, every mutual fund manager, because they “only” have $250 or so to spare. The chance that they will be able to participate in a futures market or stock exchange is practically zero. Instead, they are forced to try their only other legal alternatives — gambling their money in casinos and lotteries, or worse, joining illegal schemes out of sheer desperation.

Have you seen the lines outside the lottery booths found on every street corner? How ironic is it that most governments warn their citizens about the risks of investing in cryptocurrencies like Bitcoin, yet legalize lotteries and earn millions from it? They allow casinos to operate left and right, knowing full well that lives will be ruined and people will lose their shirts. These are guaranteed losses for the individual, guaranteed odds stacked against them, but hey, it’s nice and bright and shiny, and they give free iced tea and air conditioning, so why not?

In America, half of US adults play the lottery. That means in any given household, at least one parent probably bets on the lotto. Here at home in the Philippines, it is estimated that three million Filipinos bet regularly on the lottery, but if you count the illegal gambling schemes like “jueteng” or cockfighting, that number could quadruple. But let’s focus on the official lottery — an average person betting a dollar per day will spend about $365 in a year, a statistically guaranteed net loss. Repeat this for three million people with a fool’s hope of hitting the jackpot, and that’s $1.095 billion lost annually.

Hey, but it gives people hope, right?

Cryptocurrency Markets as a Choice

Even though governments are starting to embrace the use of cryptocurrencies,a lot of elitist “experts” out there dismiss crypto-trading as a pointless exercise. They say you will be better off holding Bitcoins and sitting on your ass waiting for profits to come, and that these kids playing with these senseless “shitcoins” are going to get burned. It is risky, volatile, offers no guarantees, and has barely any consumer protection. To most people, that’s enough of a reason to stick to the lotto.

Yet there are many more out there who choose calculated risks over statistical improbabilities and are ready to take full control of their financial destiny. If an adult can make a decision to risk his or her small capital on a cryptocurrency project, then it is their right to do so. It’s a choice in a world where the choices are few and far between.

It’s a risky choice, knowing the volatility of cryptocurrencies, but it’s a free choice. Thousands of people out there have decided that being in full control of their financial investments, no matter how small and no matter how risky, is better than gambling or allowing their hard-earned money to dwindle away slowly because of inflation and the rising cost of goods.

All that being said, a knowledgeable and hard-working cryptocurrency trader can churn $365 into a profit with the right tools and skills. I know this for a fact because I personally know people who are doing this as we speak, and we see social communities with members in the thousands sharing their knowledge and experiences with each other and helping each other learn the trade.

Young men and women who were earning minimum wage in a dead end job taught themselves to learn and earn from trading cryptocurrencies and are holding their savings in Bitcoin. Some of them were able to do well enough that they could quit their jobs and changed theirs and their families lives. This is a phenomenon that is spreading like wildfire not just in the Philippines but all over the world.

Bitcoin and cryptocurrency trading is an alternative for those without alternatives. It teaches them things they never thought they would learn about in their lifetimes — things like technical analysis, market behavior, game theory, derivatives, margin trading, reading charts — things that only wall street types are supposed to know about. Even I myself had barely any knowledge about these things until four years ago when I started our Bitcoin startup! Yet here we are, with Bitcoin and Cryptocurrencies having a combined half a trillion dollars in market capitalization, futures trading at the CBOE and CME, and cryptocurrencies trading $15 Billion in volume on a daily basis, and growing.

It’s a grassroots revolution led by people who want to take charge of their own financial future, people who know that lotteries and casinos are hopeless but didn’t had nowhere to go because they were too “small” for mainstream investment opportunities.

A Global Financial Renaissance

📷Image from Visualcapitalist.com

Cryptocurrency markets will become an avenue that will give millions of people an opportunity to participate in a global financial network worth tens of trillions of dollars. From young millennials in developing nations with small savings and big ambitions to mom-and-pop business owners looking to reinvest some profits in promising crypto-projects, these kinds of people will be the backbone of this industry. Big players are coming in, yes, but don’t underestimate the underdogs — bloggers were not given much of a chance against big publishers back then too. The big players play with Bitcoin right now, but there are hundreds of alternatives.

When this industry matures, we will see the early trailblazers of today turning into educators and mentors, teaching the next generation about cryptocurrency markets. We will see simple, secure, and accessible platforms, with consumer protection as a standard, not just on the web but in mobile applications. We will see more mature financial instruments in the cryptocurrency markets, with lesser volatility and risk to the investor. A teenager in Manila will be able to trade crypto- derivatives with a grandmother in Florida. Everyone and anyone, with any amount of capital, will be able to invest in robust global markets.

Back to the original point, ponzi schemes succeed not because people are easily fooled but because people are desperate and don’t have many options to choose from. Hopefully, with the advent of new and viable options in the cryptocurrency space, more people will steer clear of these schemes.

Bitcoin and cryptocurrencies represent a major shift in how people can invest and trade in global capital markets. It opens up markets and eliminates a lot of barriers of entry to allow everyone to participate freely.

It’s exciting to watch this unfold today. It is a truly exciting time play a part in the growth of this industry.