The massive hype surrounding the crypto world is unlike anything I have witnessed over three decades in and studying the financial markets. This includes my direct participation in the securities markets while the dotcom boom raged and collapsed. Crypto far exceeds that excess. There are billions of dollars and hundreds of thousands – if not millions – of people now being sucked into the vortex of this very odd world.
What makes it so dangerous is the ability of this whirlwind to enable people “just switch off their brains and stop thinking,” as Martin Walker, recently testified to a Parliamentary Committee. In fact, it was impressive how the members of that Parliamentary Committee were unwilling to accept the simple facts that Walker tried to share with them. Evidence, clearly, of the impact of crypto hype.
Further evidence of the problem was found recently when Professor Nouriel Roubini, an economist famous for having foretold the collapse of the credit markets in 2008, testified to a Senate Committee about his longstanding view that “cyrpto is the mother of all scams and (now busted) bubbles while blockchain is the most over-hyped technology ever, no better than a spreadsheet/database.” Roubini was then made the subject of a twitter attack that appeared to be something on the scale of what the Russians did to Hillary Clinton, including rampant use of anti-semitic comments and tropes.
As a securities lawyer and legal scholar who has spent the last decade studying the decentralization of the stock markets, I have a particular interest in the bitcoin/crypto/ICO space. It is clear to me that the very same radical ideology that somehow convinced the SEC to condone the destruction of a stable stock market has now migrated towards the heart of our financial system, namely the institutions of money, banking, and payment systems. And since I also train future securities lawyers as a law professor I have a particular concern about the way that crypto has taken on momentum in the legal, banking and tech startup world where I work and study.
I plan to post information on my blog about research and events that are helping to burst the bubble that this ideological assault on our financial system represents. The principle that will guide this effort is a simple one, borrowed from the crusading progessive lawyer and future Supreme Court Justice Louis Brandeis, who wrote in his famous 1913 text, Other People’s Money and How the Bankers Use It, that “sunshine is the best disinfectant.”