Here come the influencers. The UK’s Financial Conduct Authority (FCA) has announced a £11m (GBP) campaign to attract celebrities and influencers to warn the general public about the dangers of high-risk investments. The Financial Conduct Authority (FCA) is a UK financial regulator that was established in 2013. It operates independently of the UK government.
This is an interesting dynamic to consider in the context of public messaging regarding COVID-19 information. There are many examples of programs that pay social media influencers to post specific messages related to COVID, such as compliance with mask mandates, vaccination, etc. Now the point here is not that any aspect of any of these individuals is factually true or effective, it is just about the messaging mechanisms, incentives, and trust that people place in others. Say what you will about the societal health of influencer culture, the fact remains that it exists and that large numbers of people actually place a certain degree of trust in the influencers they follow on social media. This is why government programs of this kind related to COVID have been effective.
The Financial Conduct Authority (FCA) is now leveraging this evidence to start a campaign message against “high-risk” investments to the wider public. During the COVID lockdowns in 2020, there was a spike in retail investor trading on platforms like Robinhood, especially among millennials. The massive rise in unemployment along with unemployment benefits, stimulus payments, and a rent moratorium has left many people with excess cash and too much time in their hands. Many have invested in cryptocurrencies and so-called “meme stocks”. It is probably fair to assume that many of these individuals lacked a basic understanding of the market or were seeking short-term gains.
It can be argued that this was very reckless behavior and that many of these new investors will end up hurting themselves financially. This is exactly what the FCA claims. In their announcement, the “high-risk” investments they will be posting warning messages about specifically include references to cryptocurrencies and the number of first new individual investor investments in the crypto space. For example, at Robinhood, a large portion of the money invested in cryptocurrency flowed into Dogecoin.
Now, it is 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 indicated in the ad that 8.6 million people own more than £10,000 of ‘cash investable assets’. why? Because the FCA is trying to motivate 1/5 of these people directly in the next five years to start investing. So at the same time they will start paying social media influencers to post warnings of “high-risk” investments ostensibly to protect investors, they are actively trying to encourage more and more residents to start investing their money instead of keeping it in cash.
Do you see conflicting interests and goals here? All investments come with risk and this will always be the case. This appears to be most likely an attempt by the FCA to control what people invest in rather than just protecting them from risky investments. Bitcoin presents a major potential threat to legacy markets. The more people invest in bitcoin, the more cash it takes away from the old market. Every dollar I use to invest in bitcoin is a dollar that doesn’t drive 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 somewhere. All of these markets rely on new, smaller money that continues to be used as wealth passes between generations, as well as selling old money to facilitate retirement. I have to imagine suggesting bitcoin and other cryptocurrencies suck up that liquidity instead of the stock market, real estate, etc., which is a pretty intimidating proposition for legacy institutions.
We are in the “this is how they fight us” phase. But it won’t get bad and obvious at first. It would take the form of things like this program to motivate financial influencers who built trust in the general public to spread the message “Bitcoin is bad, but the stock market is good.” They will try to pressure and twist people’s arms to part with their hard-earned money and put it on the market in order to “not miss out on the gains”. I don’t think they really care about people like that; They simply see money as a necessary fuel for the survival of the Ponzi scheme, and like America when it comes to oil reserves, they will do everything they can to get it.
Don’t lose sight of it. This is an upcoming information war and programs like this are one way it is being fought.
This is a guest post by Shinobi. The opinions expressed are their own and do not necessarily reflect the opinions of BTC, Inc. or Bitcoin Magazine.
