New advertisements by Coinbase, a cryptocurrency exchange, prey on the financial anxieties of Gen Z and other young adults. The ads, which are on heavy rotation on cable television, depict the modern economic system as rigged. In one of the ads, a young woman gets good grades, goes to college, and ends up saddled with debt. After she enters the workforce, it becomes impossible for her to afford to buy a house or start a family. She can't even afford to rent an apartment or buy a used car.
Coinbase seems to be adopting the strategy of the Republican party. Lot of fear mongering, lies, promising to fix everything, doing nothing, taking their supporters on a joyride to nowhere.
And sadly it works.
Who in their right mind would invest in crypto, a house of cards that contributes zero value in goods and services, in fact severely drains electrical energy that could be put to more productive use, and whose unregulated volatility sets investors up to be victims of market manipulation and devastating loss?
Judd, you expose injustices where no one else cares to look. I’m giving my millennial children each a gift subscription for Christmas!
I love the idea of giving gift subscriptions. You could also throw in a copy of Ben MacKenzie’s Easy Money, a very accessible and accurate dissection of crypto by an actor they’ll all be familiar with (I’m not affiliated in any way!).
I purchased a yearly subscription to PI several years ago. One of the best investments I have made recently. Knowledge is power...Judd et al provides information / knowledge on topics, it is up to the readers to share his research / insights with others. Enjoy the vacation Judd and staff. See you in 2024
The first time I ever heard of crypto was from a former friend who tried to convince me that I was just stupid for not running out and buying every coin I could afford, saying that I was gonna "miss out!"
But I understood what volatility meant and I knew that I would not monitor any financial instrument (or product) on a second-by-second basis due to it's inherant volatility, trying to either make a profit, break even or at least not lose "all or more than the original amount of my investment."
I don't think crypto will ever be for me.
But our callow youth just ripe for the plucking, have grown up in a media environment where seeking truth is like going on a snipe hunt.
This is a situation where government action may be appropriate, eh?
Thanks to the PI team for all you do. Enjoy your holiday break. Unfortunately, there will be more corporate greed and nasty politics to cover when you return.
I suppose we shouldn't be surprised to see profit for Coinbase's owners, together with hidden fees, etc., is the order of these days. These companies are just the latest form of smoke and mirrors, get rich quick, Ponzi schemes disguised as something new and novel. They're owners are expecting to be the next Sam Bankman Fried, but get away with it.
These cryptocurrency exchanges use the same business model that's been around for years, ever since the usury laws were effectively suspended. They're no different from the average credit card company, or payday lender, etc. They play upon those in need, then further impoverish them, all the while touting the possibilities of those who have, by lucky timing (or by creative fiction), done well investing with them as enticements to take unreasonable risks with your money.
The "freedom" of the cryptocurrency system allows it to be massively corrupt, with no guardrails in place to protect you when it turns out your investments have been spent to amuse the company's owners, rather than being preserved and allowed to increase in value.
There are excellent reasons why the rules and regulations for financial firms were put in place after the Great Depression. Although those rules and regulations have been dismantled to a disturbing extent by Wall Street, whose campaign contributions shout as loudly as spoiled children throwing tantrums in the halls of Congress, the aim of all those lobbyists is to allow American banks and Investment firms to throw off the last vestiges of those rules so that they can operate precisely as the cryptocurrency system already does - with NO protections for investors.
Cryptocurrency is NOT an improvement on the current financial system in the US. It is a reversion to that long-ago time before that system was put in place, when there was no FDIC, no national banking or currency system, local bank failures were very common, many parts of the country printed their own currency, and even the money you had stashed under your mattress could be rendered worthless if the organization that issued the currency went under (or it's owners converted their assets to some other currency and skipped town).
Steer clear. Work to fix what's been dismantled in the American finance system. Help make sure that the banking returns to being boring with stable, moderate profits. Drive the Ponzi's and Madoff's out of investing, and return the stock market to the reality of "buy and hold," rather than Wall Street's current "pump and dump" model, because the good old days of the Wild Wild West in finance are not something that any of us want to have any part of, but it's where Wall Street will take us if we let them.
Just another way of screwing over the vulnerable! No regulations, no rules and no accountability ! Just another method of lining the pockets of unscrupulous people !
Thank you, PI team for continuing to alert us to the ways in which "everythig is terrible" becomes that way! We see that wanting life to be easy, free of paperwork, and wanting to believe authority figures on TV, in the government, in our schools, in our churches, etc., can easily lead to being duped. Herein lies one argument in favor of earning a college education. College courses require work--PATIENCE, reading, learning how to research, looking at both (and various) sides of arguments, fulfilling committments, and utilizing time to do what may not be fun. Sports and video games are fun. Gambling can be fun. And, all of our time wasted leads to losing money, piling up debt, and sadly not learning marketable skills. Questioning is a valuable skill. How do we "make a living" and make life worth living? This article points the way to avoiding a serious pitfall.
I agree with you. I also agree about college education, with two warnings. Student debt must be addressed through no- or low-cost higher education. And, here's the kicker, today's college students don't know the word democracy. Otherwise, they'd be out in the streets protesting the fascist takeover of America. I do not see how we can prevail against the Heritage Foundation without an enormous upheaval among the colleges. They are not aware of what's going on !
Crypto in general is a HUGE gamble. Glad to say from the beginning I saw this for what it was - a large scale scam. I don't know one person who has profited from crypto but I know a lot of people who have taken losses. Glad I never got involved.
I always thought it was a scam. Heck, I could have bought a condo in Baltimore before the housing bubble collapse. Some kind of weird sounding two-part mortgage loan and some other BS that struck me as nothing but shenanigans. Sadly, a friend of mine got one of those interest-only mortgages for the first 5 years and then when she wanted to refinance, had no equity built up because she'd only been paying interest.
Thanks for this - while I guess somehow Crypto is slightly rising in respectability as a potential investment, the critique of this ad campaign is right on target. Very similar to FTX attitude - getting people to focus on unrelated ideas when - for people who want to invest their funds - all they should be thinking about is how to do so rationally and carefully. Typical cash grab, no regard for their customers’ best interest, so to speak.
I don't know if "Crypto is slightly rising in respectability" more than Crypto is slightly rising in familiarity to potential clients (because it's being portrayed as a sound investment).
Let's put it this way...Musk is big into Cryptocurrency. That means I don't want to have anything to do with it He may make a lot of money...but his integrity? Uh-Uh
Thank you for taking on this topic! I've been highly disturbed by those brazen Coinbase commercials that seem to me to be suggesting that if only we adopt crypto as our currency, our entire economic system will be reformed and everyone will be able to afford to buy houses and retire securely. It still bothers me how few repercussions the celebrities and athletes who endorsed FTX have faced, some of whom were favorites of mine before their FTX involvement exposed their naked greed. Big tech companies are getting bolder and bolder in their efforts to take total control politically, economically, and culturally, and we need watchdogs like Popular Information to keep ringing the alarm bells.
I ban Matt Damon movies for that very reason. I'm pretty sure he and Tom Brady were fined for promoting securities without a license, which is basically what crypto is.
Perpetuating the myth that you don't have to bust your ass to get ahead and that's it's someone else's "fault" you don't have all the things you "want". "Don't grab a waitress gig on the weekend, just give us what little money you have and sit back".
Whoever raised these kids to believe getting what you want is easy, have done them a great disservice.
Not only that. With video games and crypto, the young people today don't realize that the whole system (democratic socialism) is being destroyed. Where are the protests against Trump and Musk and Putin at the colleges? Maybe when they get drafted, they'll wise up.
I like the idea's 1/ you generally get what you pay for and 2/ you can't get something for nothing. 3/ Let the buyer beware. 4/There are no free rides. Years ago I looked at the casino in Las Vegas and understood that this beautiful building is paid for by the people who come in here to gamble. The facts are that this can only mean that if I wish to finance this building I can leave some money here. I believe bitcoin is the same deal... without the building. I am glad their ads highlight the fundamental injustice of the current economic and political situation in this country, however. Now lets get going on a wealth tax.
We share your concerns 100%, but we feel this piece actually ends up helping the crypto community, which, surely, is not what you intended. Here is why:
One cannot invest in crypto.
Ironically, this highlights the unintended consequences of Madison’s quote. There is a real difference between popular information and knowledge. That one can invest in crypto is a popular belief that is completely detached from the truth. It’s a result of powerful, one-sided incentive structures, the unwillingness to think critically and the misconception persisting for decades. The fallacy is also growing stronger by the minute so we must deliver the true and correct message because that is what the investing public deserves.
If you are genuinely concerned about how Coinbase preys on the financial anxieties of Gen Z and other young adults, which we believe you are, that battle will not be won by pointing out the risks of “investing” in crypto. Currently, most people are not even listening and those who do will brush it off by saying that the stock market is risky as well. The “investing in crypto” narrative does not align with the basic principles of finance, nor will it be effective.
The only path that has a shot at working is to go back to the basics and to restore the definition of investing to what it once was. Investing is buying assets well below their intrinsic value. Further, intrinsic value only comes from cash flows, which crypto does not provide. Thus, crypto cannot be an investment at any price, it is speculation, pure and simple. You can make money, but that possibility, in and of itself, is not what makes a purchase an investment. This insight is not so much new as it is forgotten. Everybody knew this a century ago. Then, slowly but surely, the word investing got hijacked.
You might have seen our name and asked, who is New Finance Institute (NFI)? We write two blogs on Substack, and the thread that binds them both is our desire to establish consensus on the definition of investing. Naturally, crypto features prominently in our discussions. Feel free to check it out at https://www.newfinanceinstitute.com/.
As for Coinbase, they are happily playing both sides of this messaging, implying that this is the best investment opportunity of a lifetime (through this ad and otherwise), but go as far as arguing in legal filings that crypto is not investing. That contradiction alone tells you what the real problem is. Of course, even when Coinbase shies away from the word investing, mainstream media fills the gap for them like Yahoo Finance just did here:
In the 21st century, the responsibility of mass promotion does not just fall on the issuer or even the trading platforms; it is a collective effort.
You may be aware that a critical hearing is coming up in January in SEC v. Coinbase. We are participating as amici, but the Court denied our request to participate in the orals for 15 minutes in what will likely be a 4-hour meeting. So, we are on record with all these arguments, but it remains to be seen how much they will be considered. There is a chance that the “crypto investing” myth will continue.
Madison wanted to make sure that knowledge governs ignorance, and it does. But popular information often trumps knowledge, and the truth-teller is by definition at a disadvantage because they have to fight against all the forces and incentives that made the information popular in the first place. Another quote, this one from Oscar Wilde, comes to mind: “Whatever is popular is wrong.”
None of this is to discredit the good work you do, or the effort that went into a post like this. As fellow writers, we know how much it takes. Our goal is to bring to your attention that the root cause of all of this is the lack of consensus on the definition of investing. That truly is the ballgame. Absent such consensus, we will get nowhere.
We are genuinely interested in uncovering the truth and we thought you’d want to know that you are not the only one! Happy to chat.
Coinbase seems to be adopting the strategy of the Republican party. Lot of fear mongering, lies, promising to fix everything, doing nothing, taking their supporters on a joyride to nowhere.
And sadly it works.
Who in their right mind would invest in crypto, a house of cards that contributes zero value in goods and services, in fact severely drains electrical energy that could be put to more productive use, and whose unregulated volatility sets investors up to be victims of market manipulation and devastating loss?
Judd, you expose injustices where no one else cares to look. I’m giving my millennial children each a gift subscription for Christmas!
I love the idea of giving gift subscriptions. You could also throw in a copy of Ben MacKenzie’s Easy Money, a very accessible and accurate dissection of crypto by an actor they’ll all be familiar with (I’m not affiliated in any way!).
I purchased a yearly subscription to PI several years ago. One of the best investments I have made recently. Knowledge is power...Judd et al provides information / knowledge on topics, it is up to the readers to share his research / insights with others. Enjoy the vacation Judd and staff. See you in 2024
The first time I ever heard of crypto was from a former friend who tried to convince me that I was just stupid for not running out and buying every coin I could afford, saying that I was gonna "miss out!"
But I understood what volatility meant and I knew that I would not monitor any financial instrument (or product) on a second-by-second basis due to it's inherant volatility, trying to either make a profit, break even or at least not lose "all or more than the original amount of my investment."
I don't think crypto will ever be for me.
But our callow youth just ripe for the plucking, have grown up in a media environment where seeking truth is like going on a snipe hunt.
This is a situation where government action may be appropriate, eh?
Yeah. They never should have allowed crypto in the first place. Its existence is a result of anarchy, which only serves lawlessness.
The latest scam. Reminds me of this one: "The Fun Side of DDT: How a deadly chemical was sold as a miracle product "https://forgottenfiles.substack.com/p/the-dark-side-of-ddt-1947
Thanks to the PI team for all you do. Enjoy your holiday break. Unfortunately, there will be more corporate greed and nasty politics to cover when you return.
I suppose we shouldn't be surprised to see profit for Coinbase's owners, together with hidden fees, etc., is the order of these days. These companies are just the latest form of smoke and mirrors, get rich quick, Ponzi schemes disguised as something new and novel. They're owners are expecting to be the next Sam Bankman Fried, but get away with it.
These cryptocurrency exchanges use the same business model that's been around for years, ever since the usury laws were effectively suspended. They're no different from the average credit card company, or payday lender, etc. They play upon those in need, then further impoverish them, all the while touting the possibilities of those who have, by lucky timing (or by creative fiction), done well investing with them as enticements to take unreasonable risks with your money.
The "freedom" of the cryptocurrency system allows it to be massively corrupt, with no guardrails in place to protect you when it turns out your investments have been spent to amuse the company's owners, rather than being preserved and allowed to increase in value.
There are excellent reasons why the rules and regulations for financial firms were put in place after the Great Depression. Although those rules and regulations have been dismantled to a disturbing extent by Wall Street, whose campaign contributions shout as loudly as spoiled children throwing tantrums in the halls of Congress, the aim of all those lobbyists is to allow American banks and Investment firms to throw off the last vestiges of those rules so that they can operate precisely as the cryptocurrency system already does - with NO protections for investors.
Cryptocurrency is NOT an improvement on the current financial system in the US. It is a reversion to that long-ago time before that system was put in place, when there was no FDIC, no national banking or currency system, local bank failures were very common, many parts of the country printed their own currency, and even the money you had stashed under your mattress could be rendered worthless if the organization that issued the currency went under (or it's owners converted their assets to some other currency and skipped town).
Steer clear. Work to fix what's been dismantled in the American finance system. Help make sure that the banking returns to being boring with stable, moderate profits. Drive the Ponzi's and Madoff's out of investing, and return the stock market to the reality of "buy and hold," rather than Wall Street's current "pump and dump" model, because the good old days of the Wild Wild West in finance are not something that any of us want to have any part of, but it's where Wall Street will take us if we let them.
Tom Brady and Matt Damon (I think) were both fined for basically marketing securities without a license in their commercials shilling crypto.
Thank you for your perspective, and awareness of how regulations have saved us from disasters.
A masterful summation indeed Greg.
Just another way of screwing over the vulnerable! No regulations, no rules and no accountability ! Just another method of lining the pockets of unscrupulous people !
Thank you, PI team for continuing to alert us to the ways in which "everythig is terrible" becomes that way! We see that wanting life to be easy, free of paperwork, and wanting to believe authority figures on TV, in the government, in our schools, in our churches, etc., can easily lead to being duped. Herein lies one argument in favor of earning a college education. College courses require work--PATIENCE, reading, learning how to research, looking at both (and various) sides of arguments, fulfilling committments, and utilizing time to do what may not be fun. Sports and video games are fun. Gambling can be fun. And, all of our time wasted leads to losing money, piling up debt, and sadly not learning marketable skills. Questioning is a valuable skill. How do we "make a living" and make life worth living? This article points the way to avoiding a serious pitfall.
I agree with you. I also agree about college education, with two warnings. Student debt must be addressed through no- or low-cost higher education. And, here's the kicker, today's college students don't know the word democracy. Otherwise, they'd be out in the streets protesting the fascist takeover of America. I do not see how we can prevail against the Heritage Foundation without an enormous upheaval among the colleges. They are not aware of what's going on !
Crypto in general is a HUGE gamble. Glad to say from the beginning I saw this for what it was - a large scale scam. I don't know one person who has profited from crypto but I know a lot of people who have taken losses. Glad I never got involved.
I always thought it was a scam. Heck, I could have bought a condo in Baltimore before the housing bubble collapse. Some kind of weird sounding two-part mortgage loan and some other BS that struck me as nothing but shenanigans. Sadly, a friend of mine got one of those interest-only mortgages for the first 5 years and then when she wanted to refinance, had no equity built up because she'd only been paying interest.
If it sounds too good to be true, it most likely is - LOL
It's amazing how long a ponzi scheme can last....then again, Madoff took awhile too...
Thanks for this - while I guess somehow Crypto is slightly rising in respectability as a potential investment, the critique of this ad campaign is right on target. Very similar to FTX attitude - getting people to focus on unrelated ideas when - for people who want to invest their funds - all they should be thinking about is how to do so rationally and carefully. Typical cash grab, no regard for their customers’ best interest, so to speak.
I don't know if "Crypto is slightly rising in respectability" more than Crypto is slightly rising in familiarity to potential clients (because it's being portrayed as a sound investment).
Let's put it this way...Musk is big into Cryptocurrency. That means I don't want to have anything to do with it He may make a lot of money...but his integrity? Uh-Uh
BTW Judd...keep up the great work!!!
Thank you for taking on this topic! I've been highly disturbed by those brazen Coinbase commercials that seem to me to be suggesting that if only we adopt crypto as our currency, our entire economic system will be reformed and everyone will be able to afford to buy houses and retire securely. It still bothers me how few repercussions the celebrities and athletes who endorsed FTX have faced, some of whom were favorites of mine before their FTX involvement exposed their naked greed. Big tech companies are getting bolder and bolder in their efforts to take total control politically, economically, and culturally, and we need watchdogs like Popular Information to keep ringing the alarm bells.
I ban Matt Damon movies for that very reason. I'm pretty sure he and Tom Brady were fined for promoting securities without a license, which is basically what crypto is.
Perpetuating the myth that you don't have to bust your ass to get ahead and that's it's someone else's "fault" you don't have all the things you "want". "Don't grab a waitress gig on the weekend, just give us what little money you have and sit back".
Whoever raised these kids to believe getting what you want is easy, have done them a great disservice.
You want it? WORK FOR IT.
Not only that. With video games and crypto, the young people today don't realize that the whole system (democratic socialism) is being destroyed. Where are the protests against Trump and Musk and Putin at the colleges? Maybe when they get drafted, they'll wise up.
I like the idea's 1/ you generally get what you pay for and 2/ you can't get something for nothing. 3/ Let the buyer beware. 4/There are no free rides. Years ago I looked at the casino in Las Vegas and understood that this beautiful building is paid for by the people who come in here to gamble. The facts are that this can only mean that if I wish to finance this building I can leave some money here. I believe bitcoin is the same deal... without the building. I am glad their ads highlight the fundamental injustice of the current economic and political situation in this country, however. Now lets get going on a wealth tax.
Judd,
We share your concerns 100%, but we feel this piece actually ends up helping the crypto community, which, surely, is not what you intended. Here is why:
One cannot invest in crypto.
Ironically, this highlights the unintended consequences of Madison’s quote. There is a real difference between popular information and knowledge. That one can invest in crypto is a popular belief that is completely detached from the truth. It’s a result of powerful, one-sided incentive structures, the unwillingness to think critically and the misconception persisting for decades. The fallacy is also growing stronger by the minute so we must deliver the true and correct message because that is what the investing public deserves.
If you are genuinely concerned about how Coinbase preys on the financial anxieties of Gen Z and other young adults, which we believe you are, that battle will not be won by pointing out the risks of “investing” in crypto. Currently, most people are not even listening and those who do will brush it off by saying that the stock market is risky as well. The “investing in crypto” narrative does not align with the basic principles of finance, nor will it be effective.
The only path that has a shot at working is to go back to the basics and to restore the definition of investing to what it once was. Investing is buying assets well below their intrinsic value. Further, intrinsic value only comes from cash flows, which crypto does not provide. Thus, crypto cannot be an investment at any price, it is speculation, pure and simple. You can make money, but that possibility, in and of itself, is not what makes a purchase an investment. This insight is not so much new as it is forgotten. Everybody knew this a century ago. Then, slowly but surely, the word investing got hijacked.
You might have seen our name and asked, who is New Finance Institute (NFI)? We write two blogs on Substack, and the thread that binds them both is our desire to establish consensus on the definition of investing. Naturally, crypto features prominently in our discussions. Feel free to check it out at https://www.newfinanceinstitute.com/.
As for Coinbase, they are happily playing both sides of this messaging, implying that this is the best investment opportunity of a lifetime (through this ad and otherwise), but go as far as arguing in legal filings that crypto is not investing. That contradiction alone tells you what the real problem is. Of course, even when Coinbase shies away from the word investing, mainstream media fills the gap for them like Yahoo Finance just did here:
https://finance.yahoo.com/news/coinbase-ceo-reacts-to-jpmorgan-ceo-jamie-dimons-suggested-crypto-ban-230846116.html
In the 21st century, the responsibility of mass promotion does not just fall on the issuer or even the trading platforms; it is a collective effort.
You may be aware that a critical hearing is coming up in January in SEC v. Coinbase. We are participating as amici, but the Court denied our request to participate in the orals for 15 minutes in what will likely be a 4-hour meeting. So, we are on record with all these arguments, but it remains to be seen how much they will be considered. There is a chance that the “crypto investing” myth will continue.
Madison wanted to make sure that knowledge governs ignorance, and it does. But popular information often trumps knowledge, and the truth-teller is by definition at a disadvantage because they have to fight against all the forces and incentives that made the information popular in the first place. Another quote, this one from Oscar Wilde, comes to mind: “Whatever is popular is wrong.”
None of this is to discredit the good work you do, or the effort that went into a post like this. As fellow writers, we know how much it takes. Our goal is to bring to your attention that the root cause of all of this is the lack of consensus on the definition of investing. That truly is the ballgame. Absent such consensus, we will get nowhere.
We are genuinely interested in uncovering the truth and we thought you’d want to know that you are not the only one! Happy to chat.
New Finance Institute