5 Reasons Why Adams' Crypto Gambit Could Backfire Spectacularly

Mayor Adams' continued embrace of cryptocurrency for New York City feels less like visionary leadership and more like a high-stakes gamble with taxpayer money. The promise of this kind of innovation and economic growth is pretty exhilarating. A deeper dive reveals a number of surprising traps that would result in NYC residents walking away empty-handed. Here’s why this crypto crusade is setting itself up to fail, badly.

1. Volatility Threatens City's Financial Stability

Cryptocurrencies are notoriously volatile. We all know that Bitcoin, Ethereum and other digital assets move up and down by 10-20% in a few short hours. Connecting city projects or public services to these assets is dangerous. It’s akin to building a home on the San Andreas fault.

Now imagine the city making a decision to invest in a crypto-based infrastructure project. Shortly thereafter, the value of those underlying assets goes down a cliff. This would result in enormous budget shortfalls, delayed projects, and in the end, an enormous cost to taxpayers. Remember the dot-com bubble? This is starting to sound eerily familiar, only with even lower levels of regulatory scrutiny. Are we really ready to wager vital services on an experiment? We shouldn’t endanger them just because it's an uncertain outcome of a capricious market fueled by hype.

2. Regulatory Minefield: Uncharted Territory

The regulatory environment for cryptocurrency is still very much a work in progress. As a result, federal and state agencies are struggling to figure out how to classify, regulate, and police these digital assets. This ambiguity has produced a dangerous minefield for any city that hopes to adopt crypto into their processes.

Otherwise, New York will be caught up in litigation or shelling out for unexpected compliance expenses as the rules of the game continue to shift. In addition, the absence of uniform rules and regulations invites fraud, manipulation, and other illicit conduct. Are we really ready to go down this legal and ethical rabbit hole? It’s akin to attempting to construct a high-rise on quicksand – the underpinnings just aren’t there.

3. Exacerbating Existing Economic Inequalities

The promise of crypto as a democratizing force is an empty one. In practice, ownership and trading activity on crypto exchanges are highly skewed towards those with much more wealth. Finding ways to incorporate crypto into the city’s economy might unintentionally deepen the divide between the city’s haves and have-nots.

Think about it: who benefits most from crypto-based investment opportunities? Those who have the disposable income but the financial literacy to understand and operate in the highly technical world of digital assets. At the same time, low-income residents–many of whom are working harder just to stay in the same place–would be doubly penalized and potentially marginalized. Is this what we want “inclusive” economic development to look like in New York City?

4. Trump Connection: Red Flags Abound

That was just before Mayor Adams’ new friend, President Trump, ramped up his own crypto-mania. This timing is deeply suspicious indeed. Trump himself has been a vocal proponent of digital assets, and his administration's approach to crypto regulation has been… let's just say, controversial.

The dismissal of the Adams corruption case adds to the blaze. This latest ruling, which the Trump Justice Department supported, takes that anxiety to the next level. While I know that correlation doesn’t make causation, the timing of these events is more than a coincidence. Or are we seeing a well orchestrated campaign to protect and advance crypto while damaging the public’s trust in the process? All of this bears a striking resemblance to the lead-up to the 2008 financial crash — only this time, it’s online.

It’s important to point out that Adams has disclosed owning between $5,000 and $54,999.99 of Bitcoin in 2023. In December 2024, he claimed it would be worth even more.

5. Ignoring Proven Economic Development Strategies

Rather than continue to chase the crypto rainbow, New York City should invest in realworld, tried-and-true economic development strategies. Those make investing in higher ed, infrastructure and affordable housing a much more viable option for creating long-lasting, inclusive economic growth.

Why wager on a risky, unregulated asset class when we should be building the underpinnings of our economy? We need to increase access to small business support, job training programs, and healthcare. All New Yorkers stand to benefit from these investments. They aren’t merely bad because they only benefit a handful of insiders already raking in billions on the crypto boom.

Mayor Adams’ crypto gamble is both a bad idea and a deeply reckless proposition with potentially devastating consequences. Now more than ever is the time to demand a smarter, fairer, and more transparent approach to economic development. Instead, we should take care of the needs of everyday New Yorkers – not just the crypto elite. The time for caution is now.

Mayor Adams' crypto gamble is a risky proposition with potentially devastating consequences. It's time to demand a more prudent, equitable, and transparent approach to economic development – one that prioritizes the needs of all New Yorkers, not just the crypto elite. The time for caution is now.