Investors have always been advised to be cautious, and this is especially crucial in the unregulated realm of cryptocurrencies. The recent collapse of FTX, which was marketed as an easy way for everyday investors to buy, sell, and hold digital currencies, serves as a clear warning for those drawn in by the allure of quick profits.

Celebrities promoting cryptocurrency were the stars of this year’s Super Bowl ads, with some endorsing it as investors and others receiving payment for their endorsements. However, investors should not be swayed by such endorsements, as a $1,000 investment in bitcoin promoted by Matt Damon for Crypto.com last year would be worth less than $300 today.

Investments are subject to fluctuations, which is part of what drives markets. But the reality is that crypto investors are operating without a safety net, much like trapeze artists performing high above the ground. The recent events at FTX amounted to a bank run, but unlike in traditional banking, deposits made by crypto investors are not insured. Currently, Congress and regulatory bodies for banking and securities are in the early stages of regulating this trillion-dollar sector of the market.

Economist Paul Krugman believes that increased regulation is likely in the future for cryptocurrencies, as the sector continues to grow. However, if it is found to be an unsustainable enterprise, it could disappear altogether rather than being heavily regulated.