BRYAN, Texas — Cryptocurrencies have slowly become the hottest trend that's promised to turn people major profits.
However, many have begun to believe it's just a broken system that people should stay away from when looking into investment targets in 2023, according to a researcher.
To simplify a very complex topic: blockchain is the technology that enables the existence of crypto, while bitcoin is one of the most highly valued cryptocurrencies, which was created by blockchain technology.
John McCaskill is a clinical professor at the University of Texas at Dallas, who studies trends in the finance sector. His latest work explains the complexities of blockchain technology, how they connect to cryptocurrencies, and how it all ties together.
As lawsuits loom over the FTX company, secure and safe investments could be the way to go as the future of crypto world still remains uncertain.
In November of 2022, the world saw just that one of the largest crypto trading platforms, FTX, collapsed and filed for bankruptcy. An estimated $415 million was stolen by hackers, according to FTX Co-founder Sam Bankman-Fried.
FTX reported that $8 billion of customer funds were missing because they weren't able to meet the demands of the many people trying to buy into crypto and make a profit.
"You're counting on your retirement, your college fund or something like that I absolutely wouldn't invest in it," said McCaskill. "I'd just stay away from it."
He continued, "Cryptocurrency world at large, and they notice some interesting things that began to happen and it looks as though that market is being manipulated."
Now in 2023, many people are scrambling to decide if crypto is even worth investing in with how much scrutiny the platform has come under.
McCaskill believes cryptocurrencies are ultimately fronts to bring people in and manipulate who turns a profit and who loses it all. He even drew a parallel between gambling in Las Vegas casinos to clearly paint the picture of what the world of crypto was really like, with the latter being an easier and less riskier way to make money than investing into crypto.
"You're literally fighting against very very well resourced companies that these major brokerage houses that are using algorithms and have advantages over individual investors," said McCaskill.
It's a rollercoaster experience that will eventually have to end. This time around he is strongly encourages people to play it safe.
"Money chases money, these assets kind of chase each other around and they create these accelerating spirals, they'll go up then all of sudden they'll burst and crash," said McCaskill. "It's great when you're going up."
However, McCaskill didn't want the bleak portrayal of crypto to discourage potential investors from finding something else to pursue financially.
"Investing in the broad market is probably the safest route you can go," he said.
Things such as stocks, equities, are all things that can diversify and strengthen your financial portfolio.