I realize most people have not been shorting crypto, although that would have been a smart move in the last couple of months. But the general public is nonetheless a big gainer from the sharp drop in crypto prices since October highs.

In fairness, the sum may not be “trillions,” more likely somewhere a bit over a single trillion. But in the era of Donald Trump, trillions would be far more accurate than most of what comes out of the president’s mouth.

Crypto and Counterfeit Currency

Before doing the numbers, it’s worth laying out the basic story. Imagine that a tremendously talented gang of counterfeiters was able to produce hundred-dollar bills that were indistinguishable from the ones printed by the Treasury. Suppose that they printed up tens of billions of these bills and got them into circulation.

The gang would be able to buy all sorts of things with their counterfeit money, possibly creating general inflation, but almost certainly pushing up the price of items in short supply, like houses, and tickets to big-name concerts and major sports events, like the Superbowl and the World Cup.

If some supersleuth detective figured out a way to recognize the counterfeit bills, they could then remove trillions of dollars of fake money from circulation. This would benefit the general public by reducing demand in the economy and reversing the run-up in the price of housing and Superbowl tickets.

It is the same story with plunging crypto prices. Crypto has no inherent value, but people with large fortunes in crypto can........

© Common Dreams