Do cryptocurrencies have any tangible value? No. They are backed by nothing other than the faith of the people who own them. Do they make transactions easier? No. It takes about 10 minutes for a Bitcoin transaction, and the average transaction fee is $20. Do they provide a reliable store of value? Hell, no. Wild swings in their value make them unreliable as a means of payment. Bulls will point out that, unlike fiat currencies, cryptocurrencies have strictly limited issuance. But that supposed advantage is undermined by the fact that cryptocurrencies themselves are unlimited. Bitcoin was the first. But there are now over 10,000 cryptocurrencies. (And many of the newer ones offer greater security, faster transaction processing and more sophisticated technical features.) Cryptocurrencies offer anonymity, that's true. That's a plus for those buying and selling things they wouldn't want anyone to see. But it's a short list in our increasingly libertarian era. Yes, digital currencies and the blockchain - the decentralized record-keeping technology behind it - will be around for a long time. But they are not the incredible innovations that advocates claim. Incredible innovations solve problems. Venmo made it easy to share and transfer money. Zoom made multi-person teleconferencing a snap. MRNA technology made it possible to create safe and effective new vaccines in record time. What do cryptocurrencies facilitate? Criminal activities. If you are a terrorist network, heavy weapons dealer, drug cartel or human trafficker, Bitcoin is a godsend. Coveware, a firm that assists ransomware victims, reports that 100% of ransoms are demanded in crypto. (As was the case with the Colonial Pipeline this month.) And attacks by cybercriminals are up. Way up. Chainalysis, a crypto security company, said ransomware payment quadrupled last year to $348 million. This has hardly gone unnoticed by governments here and abroad. It's just a matter of time before they step on this thing with new regulations and outright prohibitions. That will make last week's dramatic crypto sell-off - Bitcoin has lost nearly half its value from the mid-April high - look like a minor stumble. It's not possible to make a rational prediction about when irrational behavior will end, of course. But it will end as it always does... in tears. During the dot-com bubble, I warned investors to get out. During the housing bubble of the 2000s, I warned investors to get out. During the meme stock (GameStop) bubble a few months ago, I warned investors to get out. Today I am warning cybercurrency investors - again - to resist "buying the dip" and get out now. It's okay to make mistakes as an investor. That's inevitable. But you never want to look back and say, "I was such an idiot." This is one of those times. Good investing, Alex P.S. I encourage you to join me for an upcoming live broadcast with longtime subscriber and bestselling author Bill O'Reilly on Thursday, June 3, at 1 p.m. ET. The strategy we'll reveal during the big event is one I've used - quite successfully - for 20 years. Simply click here to register. | 
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