Shares of Deutsche Bank (NYSE: DB), Germany’s largest bank, closed just above $7 on Friday. The price is more than 95% from the stock’s all-time high (ATH) over $155 in the summer of 2007, making Bitcoin look like an attractive alternative.
Investors holding the bags on the stock have patiently waited for a recovery for twelve years. While many in the legacy finance world have called cryptocurrencies fraud, others see the truth as the opposite.
Certainly, there are frauds within the cryptocurrency community. A host of companies have left investors holding their bags.
Take, for example, the recent announcement by the Securities and Exchange Commission (SEC) about the prosecution of the founders of Shopin. The ICO allegedly defrauded customers of $42 million through issuing non-registered securities.
However, frauds certainly exist in the legacy financial world as well. News of Ponzi schemes like Bernie Madoff’s, or recent news of fines like those for Deutsche Bank’s own subprime mortgage boss abound.
The problem, of course, is that frauds in the larger legacy finance world are more expected now. Few are surprised at the constant barrage of back-handed deals and insider trades that make up Wall Street.
However, because cryptocurrency is such a nascent market, and has been widely hailed as revolutionary, frauds grab attention.
What to Do With Bitcoin?
The situation, it seems, is that the financial world is filled with fraudsters. Whether in the legacy world or the cryptocurrency world, when money is involved, someone is sure to scam.
The answer is not to blame the overall industry. To say that all cryptocurrencies like Bitcoin are frauds because of one scam is irrational. That logic applied to legacy finance would mean that every single member of the financial world is a wolf. Instead, even with government controls, investors need to be certain that they understand the instrument they’re buying.
The other important factor is highlighted in the tweet above. When trusted parties are involved, trust is sure to fail. However, Bitcoin is built on a ‘trustless’ system, making it rise above the legacy financial world.
Images are courtesy of Shutterstock, Twitter.