Tri-State experts weigh in on cryptocurrency drop
EVANSVILLE, Ind. (WFIE) - Recent drops in the stock market have been bad news for investors, especially those that have put money in cryptocurrencies.
Cryptocurrencies like Bitcoin have exploded in popularity in the past few years. Recent drops in the stock market have hit tech especially hard, but one local economist says this doesn’t mean the end for crypto.
Brick-and-mortar banks, along with paper bills and metal coins, seem increasingly old-fashioned when compared to things like cryptocurrencies, but maybe not as much when their value suddenly plummets.
“It causes people to reassess again how much commitment they want to have to something like that,” said Old National Wealth Management Chief Economist Matt Finn.
Cryptocurrencies are currencies that exist entirely online on a secure network called the blockchain, which tracks and verifies transactions. Finn says it may be hard for people to wrap their heads around this, but people have gotten used to things like credit cards too.
“People have adapted to that sort of technology and understand that they’re still exchanging money even though they’re not reaching into their pocket and pulling out green currency,” said Finn.
He says crypto is a disruptive new technology with a lot of potential. He says some large companies use a similar network technology to monitor their supply chains.
He says the wild swings may be in part because the government hasn’t figured out what to make of crypto yet.
“This is the problem with currency that is largely unregulated,” said Finn.
He says the government probably hasn’t stepped in up until now to keep from stifling creativity and innovation. He thinks regulation and stability may follow when one of these online coins shows it can have some stability on its own.
“We can all joke about the fact that government regulation probably never improved anything, except it does make things generally safer,” said Finn.
Finn encourages people to be very skeptical, but he also says Walmart and Amazon were once disruptive technologies with their own ups and downs, and eventually they found a way to be successful.
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