Cryptocurrency is “Rat Poison” in Today’s Financial Markets

By: Donald V. Watkins

Copyrighted and Published on December 2, 2025

An Editorial Opinion

Cryptocurrency is a form of digital currency. Unlike traditional currencies that are issued by central government authorities within an established banking system that is insured and highly regulated for customer safety, cryptocurrencies exist on decentralized virtual networks and use “blockchain technology" to securely record, store, and verify data.  The value of cryptocurrency is based solely on supply and demand, speculation, and perceived future usefulness. 

I have worked in the financial services industry since the early 1980s. In 1986, investment banker Nathan A. Chapman, Jr., and I co-founded The Chapman Company in Baltimore, Maryland. During the course of my service on The Chapman Company's board of directors, we took four Chapman Company affiliates public on a listed American stock exchange: (a) DEM, Inc. (NASDAQ Symbol: DEMI); (b) Chapman Holdings (NASDAQ Symbol: CMAN); (c) Chapman Capital Management Holdings (NASDAQ Symbol: CMGT); and eChapman Holdings (NASDAQ Symbol: EMAN). Our corporate offices occupied the top floor (above the observation deck) of the World Trade Center in Baltimore.

In 2000, I co-founded Alamerica Bank, a full service, commercial-focused bank in Birmingham, Alabama. By 2007, the bank was No. 4 in the nation for its asset group based upon a return on assets (ROA). Its capitalization ratios and ROA were consistently among the best in the nation for all banks.

Since 2006, I have conducted large-scale investment banking transactions with Tier One investment banks all over the world. As such, I have a pretty good understanding of global financial markets and government-backed currencies around the world.

I do not own cryptocurrencies and have NEVER owned them.  To me, cryptocurrencies are as worthless as the fake money in the “Monopoly” board game. 

Multibillionaire Warren Buffett feels the same way about cryptocurrencies.  He predicts that cryptocurrencies will “come to a bad ending.”  I agree.  Buffet also says cryptocurrency is "rat poison squared.” Again, I agree.

Why Cryptocurrencies are Worthless

I believe cryptocurrencies are worthless for these reasons:

• No intrinsic value: Cryptocurrencies have no intrinsic value because they aren't backed by tangible assets like gold, or legal rights like stocks and bonds. Its value relies purely on speculation and market sentiment.

• Extreme volatility: The price of cryptocurrencies can fluctuate wildly, with double-digit percentage swings in a single day not being uncommon. This makes them a high-risk investment and unsuitable for daily transactions.

• Use in illicit activities: Because of its decentralized nature, cryptocurrency has been used in illicit activities like money laundering and ransomware attacks, leading to increased scrutiny from regulators.

• Regulatory uncertainty: The lack of clear and consistent regulation across different countries creates uncertainty for investors and makes the market susceptible to sudden shifts based on government actions.

• Ponzi-scheme characteristics: Some critics, including Nobel Prize-winning economist Eugene Fama, characterize cryptocurrency as a speculative bubble or a Ponzi-type scheme, with value dependent on new buyers entering the market.

• Technological limitations: Issues with scalability, energy consumption for mining, and user-friendliness are cited as limitations that prevent some cryptocurrencies from becoming a mainstream form of payment. 

Notable Crashes of Cryptocurrencies

Some of the most notable cryptocurrencies that have failed include the Terra (LUNA) ecosystem, the FTX exchange and its FTT token, the Celsius Network, the Three Arrows Capital (3AC) hedge fund, and the fraudulent OneCoin.  Their collapses led to significant investor losses and shook confidence in the broader crypto market.

In a 2018, Berkshire Hathaway shareholders meeting, CEO Warren Buffet offered this observation: "[Cryptocurrency] draws in a lot of charlatans who are trying to create various sorts of exchanges or whatever it may be. It's something where people who are of less than stellar character see an opportunity to clip people who are trying to get rich because their neighbor's getting rich buying this stuff that neither one of them understands.”

The Trump Effect

President Donald Trump and his family members entered the cryptocurrency business in 2025. For a variety of reasons, many power players in the financial services industry liken the Trumps to the "charlatans" Warren Buffett warned us about.

Additionally, many investors associate the Trumps with political corruption, financial scams, business crashes, and market manipulation.  Trump has bankrupted six companies and crashed another 21 business entities.  Within the last two years, Trump has been convicted of criminal business fraud and found liable for civil business fraud.

Yet, the Donald Trump and his family members were able to dive into the cryptocurrency business in 2025 without any problems from government agencies that regulate commerce in the financial services industry. The losses for their crypto investors have been massive.

After reaching record highs following their launches in January 2025, the Donald Trump ($TRUMP) and Melania Trump ($MELANIA) meme coins crashed dramatically.  Both coins have lost most of their value, with $MELANIA suffering an especially severe crash. 

Following a peak of around $75 on January 19, 2025, the $TRUMP coin's value plummeted. Though it saw a brief bump in April, its value has continued to decline.  As of late November 2025, the value was around $6.20, a 35% drop in just a few days.

The $MELANIA coin saw a steep decline following its launch and has lost nearly all of its value. As of late November 2025, its value is under $0.20, a precipitous drop from its peak of over $8 in January.

Donald Trump’s World Liberty Financial and Eric Trump’s Bitcoin mining company Hut 8, a/k/a American Bitcoin Corp., are crashing, as well.

Epilogue

Like the Dot-com bubble of the 1990s and the Wall Street derivatives that crashed global markets in 2008, I predict the cryptocurrency bubble will come to an end soon.  

Cryptocurrencies have always worthless for legitimate business transactions.  Criminals loved them because they were hard to trace and easy to use for Ponzi schemes and money laundering transactions.  Unlike cash in banks, cryptocurrency deposits on crypto exchanges are not insured by the Federal Insurance Deposit Corporation.  When they lose value, cryptocurrencies usually go down to zero in value.

Today, financial scammers and bad actors have infested the cryptocurrency industry like termites infest a house.  Last month, Donald Trump pardoned convicted money launderer and Binance founder Changpeng Zhao, the richest cryptocurrency industry player in the world. Trump also commuted to 7-year prison sentence of former private equity CEO David Gentile to 14 days in prison. These pardons and others like it add a layer of sleaze to the crypto industry.

Cryptocurrency is “rat poison” in the world of accredited financial institutions.  Nothing will ever replace hard cash that is backed by tangible assets and well-settled legal rights in a highly regulated and centralized banking system.