Why This Crypto Crash Is Different

Then came the pandemic. As governments closed down businesses and handed out money to people unable to work, central banks embarked on the most exorbitant money creation programs in history. Much of that money found its way into crypto markets, raising prices to unprecedented levels and fueling the rapid growth of high-yield lending, complex synthetic assets and toxic derivatives of a kind last seen before the 2008 financial crisis. While the real economy was shut down, there was a cryptocurrency feeding frenzy. Pension funds, hedge funds, software companies, football clubs and celebrities all got in on the act, and many ordinary people made life-changing amounts of money.

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