One of the world’s largest cryptocurrency exchanges recently collapsed. Crypto investors suffered losses of a trillion dollars.
But Mayor Eric Adams has no intention of abandoning what he called the future of commerce.
“These industries are not going to disappear because they have bottomed out,” he said at an unrelated press conference Tuesday. “This is an industry that we have to embrace.”
Responding to recent events, the mayor argued that there are bad players and “ups and downs” in all industries. He pointed to the losses he had taken in the stock market.
“Today I’m even afraid to look at it,” he said.
The remarks show the mayor’s confidence in a highly volatile and increasingly scrutinized industry. Adams’ crypto doubling comes as other prominent proponents are quietly retreating from the world of virtual currencies.
Critics have long argued that a cryptocurrency that offers a decentralized banking system that trades in digital currencies is a scam. Their fears appear to have been more justified following the front-page crash this month of FTX, a $32 billion cryptocurrency exchange company that appeared to be abusing customer funds. FTX is currently the focus of several federal investigations.
“Cryptocurrency is a self-assembled Ponzi scheme made up of Ponzi schemes, stock scams and other financial scams,” said Nicholas Weaver, a computer scientist at UC Berkeley who has been an outspoken critic of the industry.
He added: “The space has to face the sun, and if the mayor of New York thinks there’s any value in it, he doesn’t get it.”
Adams, who studied to be a computer programmer, was one of the early proponents of cryptocurrency. After winning the general election last year, he flew in a cryptocurrency billionaire’s private jet to attend the Somos conference, an annual political networking event, in Puerto Rico. As mayor, he decided to convert his first three salaries into bitcoin and ethereum, two popular cryptocurrencies. And in March, he was a participant in a conference in Miami, where he spoke about the possibilities of new digital currencies.
John Kaheny, chief executive of Reinvent Albany, a good government group, said it’s “disappointing” that the mayor continues to test cryptocurrencies.
“The City of New York has no case for government or public policy support for crypto,” he said.
The fact that the mayor will spend time looking for applications for cryptocurrency suggests a real opportunity cost for taxpayers, Kaheni said. “You don’t waste time on the real pressing issues,” he said.
On Tuesday, Adams, who previously said he wants to establish a public education program on cryptocurrencies, was touting a recent youth summit that he said taught cryptocurrencies.
When asked if he would still invest in cryptocurrencies, the mayor answered unequivocally. Pointing to his first three paychecks, he said, “Yes, my money is already there.”
Since his first paycheck, the mayor’s investment in bitcoin has fallen 44% since his first paycheck, according to Kaney.