TL;DR

Get-rich-quick schemes are as old as finance itself. The crypto craze is just another chapter in a long, sad history of market bubbles fueled by greed and misinformation. John’s story is a cautionary tale for anyone tempted by promises of easy money.

Story

John, a recent retiree, dreamt of a comfortable life. He saw ads promising incredible returns on his nest egg—too good to be true, but he desperately hoped it wasn’t. It was a classic pump-and-dump scheme. ‣ Pump-and-dump: Artificially inflating an asset’s price (the ‘pump’) to sell it at a high price (the ‘dump’), leaving late investors with worthless holdings. Like a Ponzi scheme ‣ Ponzi scheme: A fraudulent investment operation where returns are paid to earlier investors from the funds contributed by more recent investors. disguised as a cryptocurrency investment opportunity. The “guaranteed returns” were simply bait for the gullible. John, sadly, joined the many who were left penniless. His story echoes the dot-com bubble of the late 90s and the 2008 financial crisis; a cycle of greed and deception that repeats itself with each new technological fad. Remember Enron? ‣ Enron: A massive corporate scandal involving fraudulent accounting practices that led to the company’s collapse and billions of dollars in losses for investors. This is a reminder that markets, no matter how shiny the packaging, are still driven by human nature: Fear, greed, and the unwavering belief in miracles. This time, it’s crypto; next time, it could be something else entirely. The mechanics are always the same. They lure you in with promises, build hype, then cash out, leaving you holding the bag.

Advice

Never invest in anything you don’t fully understand. If the investment opportunity relies heavily on hype and promises of ’easy money’ or ‘guaranteed returns,’ walk away.

Source

https://www.reddit.com/r/wallstreetbets/comments/1n6mvmt/only_you_can_prevent_market_bubbles/