Here come the influencers. The Financial Conduct Authority (FCA) in the U.K. has announced an 11 million British pound (GBP) campaign enlisting celebrities and influencers to warn the general public of the dangers of high-risk investments. The FCA is a financial regulatory authority in the U.K. that was established in 2013. It operates independently of the U.K. government.
This is an interesting dynamic to consider given the context of public messaging relating to COVID-19 information. There are many examples of programs paying influencers on social media to propagate specific messaging relating to COVID, such as complying with mask mandates, getting vaccinated, etc. Now the point here isn’t which side of any of these individuals is factually correct or effective, it’s just about the messaging mechanisms, incentives and trust people place in others. Say what you want about the societal health of influencer culture, the fact remains that it exists and large amounts of people actually place some degree of trust in influencers they follow on social media. This is why government programs of this sort relating to COVID have been effective.
The FCA is now tapping this playbook to begin a campaign messaging against “high-risk” investments to the wider public. During the COVID lockdowns in 2020 there was a massive uptick in retail investors trading on platforms like Robinhood, especially among Millennials. The huge unemployment spike in combination with unemployment benefits, stimulus payments and rent moratoriums left many people with excess cash and plenty of time on their hands. Many invested in cryptocurrencies and so-called “meme stocks.” It’s probably fair to assume that a lot of these individuals lacked fundamental market understanding or were just chasing short-term gains.
The argument can be made that this was highly reckless behavior and that many of these new investors in the end will wind up financially hurting themselves. That is exactly what the FCA is claiming. In their announcement, the “high-risk” investments they are going to spread cautionary messaging about specifically includes mentions of cryptocurrencies and how many of these new retail investors’ first investments were cryptocurrencies. For instance, on Robinhood a massive portion of the money that was invested into cryptocurrencies was flowing into Dogecoin.
Now, it’s not entirely unreasonable to warn people against taking actions that could be financially harmful to themselves. However, there is more context to this FCA campaign than just that. They specifically mention in the announcement that 8.6 million people hold more than 10,000 GBP of “investable assets in cash.” Why? Because the FCA is trying to directly incentivize 1/5th of those people in the next five years to start investing. So at the same time they are going to start paying social media influencers to propagate warnings of “high-risk” investments in order to ostensibly protect investors, they are actively trying to encourage more and more of the population to start investing their money instead of holding it in cash.
Do you see the conflict of interests and goals here? All investment comes with risk and that will always be the case. This seems much more likely to be an attempt by the FCA to control what people are investing in rather than simply protecting them from dangerous investments. Bitcoin is a huge potential threat to legacy markets. The more people invest in bitcoin, the more liquidity it takes out of the legacy market. Every dollar I use to invest in bitcoin is a dollar that doesn’t pump up the value of the S&P 500. Every dollar I use to invest in bitcoin is a dollar that doesn’t drive up the price of real estate in some location. All of these markets depend on new, younger money continuing to use them as intergenerational wealth is transferred, in addition to older money selling to facilitate retirement. I have to imagine the proposition of bitcoin and other cryptocurrencies soaking up that liquidity instead of the stock market, real estate, etc. is a pretty terrifying proposition for legacy institutions.
We’re in the phase of “this is how they fight us.” But it’s not going to get nasty and obvious right at the start. It’s going to take the shape of things like this program financially incentivizing influencers who have built up trust in the wider populace to spread the message “Bitcoin is bad, but the stock market is good.” They’ll try to pressure and twist peoples’ arms into giving up their hard-earned cash and putting it into the market to “not miss out on gains.” I don’t think they really care about people like that; they simply see that money as a necessary fuel to keep the ponzi scheme going and, just like America when it comes to oil reserves, they will do whatever they can to acquire it.
Don’t lose sight of that. This is an information war coming and programs like this are one of the ways they are fought.
This is a guest post by Shinobi. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.
Right here come the influencers. The Monetary Conduct Authority (FCA) within the U.Okay. has introduced an 11 million British pound (GBP) marketing campaign enlisting celebrities and influencers to warn most of the people of the hazards of high-risk investments. The FCA is a monetary regulatory authority within the U.Okay. that was established in 2013. It operates independently of the U.Okay. authorities.
That is an fascinating dynamic to think about given the context of public messaging regarding COVID-19 data. There are lots of examples of applications paying influencers on social media to propagate particular messaging regarding COVID, corresponding to complying with masks mandates, getting vaccinated, and so on. Now the purpose right here isn’t which aspect of any of those people is factually right or efficient, it’s simply in regards to the messaging mechanisms, incentives and belief folks place in others. Say what you need in regards to the societal well being of influencer tradition, the very fact stays that it exists and enormous quantities of individuals really place a point of belief in influencers they observe on social media. Because of this authorities applications of this kind regarding COVID have been efficient.
The FCA is now tapping this playbook to start a marketing campaign messaging towards “high-risk” investments to the broader public. Through the COVID lockdowns in 2020 there was a large uptick in retail buyers buying and selling on platforms like Robinhood, particularly amongst Millennials. The large unemployment spike together with unemployment advantages, stimulus funds and lease moratoriums left many individuals with extra money and loads of time on their palms. Many invested in cryptocurrencies and so-called “meme shares.” It’s in all probability truthful to imagine that a whole lot of these people lacked basic market understanding or had been simply chasing short-term beneficial properties.
The argument could be made that this was extremely reckless habits and that many of those new buyers in the long run will wind up financially hurting themselves. That’s precisely what the FCA is claiming. Of their announcement, the “high-risk” investments they’ll unfold cautionary messaging about particularly contains mentions of cryptocurrencies and what number of of those new retail buyers’ first investments had been cryptocurrencies. As an illustration, on Robinhood a large portion of the cash that was invested into cryptocurrencies was flowing into Dogecoin.
Now, it’s not totally unreasonable to warn folks towards taking actions that may very well be financially dangerous to themselves. Nonetheless, there’s extra context to this FCA marketing campaign than simply that. They particularly point out within the announcement that 8.6 million folks maintain greater than 10,000 GBP of “investable property in money.” Why? As a result of the FCA is attempting to straight incentivize 1/fifth of these folks within the subsequent 5 years to begin investing. So on the similar time they’ll begin paying social media influencers to propagate warnings of “high-risk” investments as a way to ostensibly defend buyers, they’re actively attempting to encourage an increasing number of of the inhabitants to begin investing their cash as an alternative of holding it in money.
Do you see the battle of pursuits and targets right here? All funding comes with danger and that may all the time be the case. This appears more likely to be an try by the FCA to manage what individuals are investing in fairly than merely defending them from harmful investments. Bitcoin is a big potential risk to legacy markets. The extra folks put money into bitcoin, the extra liquidity it takes out of the legacy market. Each greenback I exploit to put money into bitcoin is a greenback that doesn’t pump up the worth of the S&P 500. Each greenback I exploit to put money into bitcoin is a greenback that doesn’t drive up the value of actual property in some location. All of those markets depend upon new, youthful cash persevering with to make use of them as intergenerational wealth is transferred, along with older cash promoting to facilitate retirement. I’ve to think about the proposition of bitcoin and different cryptocurrencies absorbing that liquidity as an alternative of the inventory market, actual property, and so on. is a fairly terrifying proposition for legacy establishments.
We’re within the part of “that is how they combat us.” However it’s not going to get nasty and apparent proper firstly. It’s going to take the form of issues like this program financially incentivizing influencers who’ve constructed up belief within the wider populace to unfold the message “Bitcoin is unhealthy, however the inventory market is sweet.” They’ll attempt to stress and twist peoples’ arms into giving up their hard-earned money and placing it into the market to “not miss out on beneficial properties.” I don’t assume they actually care about folks like that; they merely see that cash as a essential gas to maintain the ponzi scheme going and, similar to America in the case of oil reserves, they may do no matter they will to accumulate it.
Don’t lose sight of that. That is an data struggle coming and applications like this are one of many methods they’re fought.
It is a visitor publish by Shinobi. Opinions expressed are totally their very own and don’t essentially mirror these of BTC, Inc. or Bitcoin Journal.