FILE – Then Former President Donald Trump speaks at the Bitcoin 2024 Conference, July 27, 2024, in Nashville, Tenn. (AP Photo/Mark Humphrey, File)

I have, like so many others, been wrong about Bitcoin and crypto. But timing is not destination, and I believe one day there will be a rug-pull that will wipe trillions off the face of the crypto earth. This might happen when Bitcoin is $200,000 or $2 million, but it will happen.

For the uninitiated, a rug-pull is a coordinated effort by a concentrated group to sell their crypto holdings at a price they are content with, leaving the foolish masses with nothing but losses. It is transfer of wealth from a large to a small group. One recent and very visible example was the president’s and first lady’s meme coins.

Over $100 million was made by issuing premarket coins to insiders who captured the largest percentage of value, leading to an average investor wipeout. The coins now trade at a fraction of their issued value. Melania’s is now down 99 percent from its high. A total of 764,000 investors lost money.

Not to be daunted, the Trump family’s new company, World Liberty Financial, just started trading. Its share is in the billions, with no assets (just digital ones) outside the capital raised. Reports are that it has been hacked and is down substantially from the initial offering.

The newest craze, already in a massive crash just weeks after setting up shop, are “crypto treasury stocks.” Investors buy into companies announcing they are going to buy crypto as part of their business plan. Many are already down over 90 percent. This mirrors the 1999 insanity add-.com-to-your-name to quadruple your valuation.

Insiders are often referred to as “whales,” i.e., large holders who can affect the market. Whales decide when to pull the rug. They can execute this anytime they think it profitable, sometimes within hours of issuance like Kanye West’s YZY token where 51,000 “traders” lost $74 million while 11 made over a $ 1 million each. There are hundreds of other meme tokens with a similar story. Over 3.7 million crypto currencies have been launched since 2021 that are classified as “dead” by CoinGecko. Yet every day a new one is promoted and put to market.

The term “bubble” has been on financial lips lately. However, a bubble is usually tied to inflation of valuationof a real asset like a stock, bond, real estate, or commodity that trades above its historical norms. Analysts utilize dozens of metrics to measure the probability that future prices of an asset will fall and the bubble will deflate.

No such financial metrics exist for crypto because it inhabits the fiat world of valuations. What is the value of a Pepe the frog meme token? What is the value of the hundreds of thousands of “sh–coins” minted every day on Solana? What is the difference from one token to another, since they have zero intrinsic value?

If you want to speculate, why not buy all the Labuba, the Chinese plush doll, one can? For sure, it is harder to manufacture them than to create a digital token on the blockchain.

A recent article in Forbes was a tell for the crypto future. Pointing out that $84 trillion was going to change hands from boomers to their kin, the writer mocked the old way of making money on “land, industrial enterprise, or equities.” Voila. It was going to be built on the “decentralized rails of blockchain technology.” In other words, all this hard-earned, time-based asset appreciation was going to be speculated with. I hope the recipients of this generational largess look out below.

There is no doubt that fraud and theft are at the heart of digital currencies. Not a day goes by without an article about some scam ruining the lives of the deceived. From “pig butchering” romance scams to elaborate North Korean phishing attacks on a cold wallet.

The mighty crypto visionary kingpins, Sam Bankman-Fried of FTX infamy and Do Kwon of the Terraform fraud, once venerated by their “crypto bros,” are now in the oldest non-digital place: jail. Yet the beat goes on, with the largest Wall Street institutions doing what they do best, devising ever more opaque leveraged vehicles for their retail customers to put money into, like Perps. This casino-like financial instrument allows for 100X leveraged bets in an endless loop.

Another new game is to “tokenize” every asset. Remember how well “synthetic” debt instruments worked out?

Then there are stablecoins. The issuers’ promises make little sense unless you need to anonymously transfer millions abroad for a pallet of ecstasy. As for stablecoins’ promised transaction efficiency, my Visa card works around the globe at light speed.

One day, when we’re in a rug-pull crypto depression and everyone is demanding a bailout, we will look back at this utter folly through tears in our eyes.

Jonathan Russo writes about entrepreneurship, economics, domestic and foreign policy and cultural issues.

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