\ Bitcoin and other magic internet money loans are essentially unsecured loans that can put your financial health at risk. Because

Key Highlights :

1. Silicon Valley Bank (SVB) last week collapsed, raising serious issues far more significant than the obvious ones cited by the financial press and a broad range of Washington politicians. Chief among these are bank loans against dubious assets.

2. Bitcoin and its imitators are not money. They are not currency. They're hardly used to buy and sell, an unsurprising fact given that by design the Bitcoin system can process only seven transactions per second compared to many thousands of transactions per second for credit cards.

3. Bitcoin and its imitators are just a high-tech Ponzi scheme. Instead of Charlie Ponzi or Bernie Madoff personally running the con, the crypto scam relies on decentralized computer blockchain and "mining" of mathematical solutions.

4. Bitcoin's supposed inventor, who went by the pseudonym Satoshi Nakamoto, has never been identified . He or she has since vanished, leaving holders with a digital string worth only as much as the next fool, or crook, will pay for this imaginary asset.

5. Early participants in Ponzi schemes profit mightily if they cash out while the gullible souls who get sucked in later wipe out. That is what happened to SVB, America's 16 th largest bank, which was big on crypto loans.

6. Many Bitcoin "investors" have already been wiped out as the "market cap" of Bitcoin plummeted from nearly $1.3 trillion in 2021 to about $389 billion on Friday, down almost 70% .

7. Why do banking regulators allow our federally insured and regulated banks to make loans using magic internet money as collateral? That's a crazy policy, no different than allowing banks to accept buckets of ice

The collapse of Silicon Valley Bank (SVB) last week raises serious issues far more significant than the obvious ones cited by the financial press and a broad range of Washington politicians. Chief among these are bank loans against dubious assets. That's not getting much if any attention in the news or from Washington and is likely to soon be swept under the rug, allowing needlessly risky banking practices to continue.

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