A lot of people have lost a lot of money in cryptocurrency lately, including New York City Mayor Eric Adams. Last November, with Bitcoin peaking near $69,000 and his inauguration just weeks away, Adams announced a grand plan to not only receive his first three paychecks in cryptocurrency, but to make New York City a “cryptocurrency hub.” For a mayor with few legislative priorities, that commitment ranked high on the short list.
On January 21, according to reports in the Verge, Adams received the first of his biweekly paychecks — $5,900, according to the New York Post — and transferred that money to crypto exchange Coinbase. Adams’ office confirmed that he had indeed converted three paychecks to cryptocurrency, splitting the money between Bitcoin and Ethereum.
A little back-of-the-envelope math gives a rough idea of how much money that decision cost Hizzo. At the time of writing, Bitcoin stands at $16,811.40; Ethereum is $1229.74. They may have grown since then; it is possible that by the time you read this they will be even lower. That means Adams lost roughly 53 percent, 60 percent, and 57 percent on his first three salaries.
Check out my work: I calculated these numbers based on the daily average of each currency on each of the three payout days. I assumed that the money was spread evenly between two separate coins. The value of cryptocurrencies can fluctuate significantly even from minute to minute (critics would say that’s just one reason why they don’t seem particularly suitable as currencies), so it’s possible that Adams managed his purchases so perfectly that he beat the daily average. It’s also possible he loaded up on Bitcoin, which is down just 64 percent this year, instead of Ethereum, which is down 66 percent. He might have saved a few bucks here or there more than the trader’s daily average – he still identified as a computer enthusiast. But these last two numbers tell most of the story. All the major cryptocurrencies that haven’t crashed to zero share the same dizzying downtrend.
Where does that take us? In good old-fashioned American greenbacks, that means Adams probably lost a little over $10,000 on the trick, which is not an insignificant amount of his salary. On Friday, he cashed in 24th the salary of its mayor.
I say “probably” in part because the mayor’s office would not confirm whether Adams still holds all that cryptocurrency. He also declined to comment on whether the mayor was worried about the liquidity of the exchange where he parked his earnings, as crypto exchanges FTX, Celsius and BlockFi have all fallen in the past month. (For now, at least, Coinbase’s stock isn’t doing so hot, but the exchange seems to have escaped the crypto contagion.)
Many people have learned a hard lesson that must not be repeated. Not Adams. His office also told me that his initial pledge to make the city a cryptocurrency hub remains unchanged and unwavering due to the incredible display of bribery and misconduct that has proven to be commonplace in the sector.
“Mayor Adams believes that cryptocurrency, blockchain and other emerging technologies offer an incredible opportunity for long-term innovation and economic growth, and he wants to see that happen right here in New York as we continue to recover from COVID-19,” said spokesman Jonah Allon . “As with all financial products, price fluctuations are an expected feature of the market—and it is short-sighted to believe that industry stagnation is an indication that it will not experience long-term growth.”
Meanwhile, Adams’ second commitment in November, support for a New York-specific cryptocurrency, fared even worse. NYCCoin is down nearly 94 percent since it was launched with the backing of the mayor in February. MiamiCoin, which began trading in August 2021 and was pushed by the city’s mayor, Francis Suarez, who is equally keen on the cryptocurrency, has fallen 98 percent over the year, trading at $0.000458.
Adams isn’t the only New York politician caught up in the rapidly collapsing crypto ecosystem. Tail. Ritchie Torres, who represents the Bronx, has also made headlines recently, inviting that the Office of Governmental Affairs investigate why the Securities and Exchange Commission did not expose FTX before its collapse.
In March, Torres was one of eight members of Congress who sent a letter insisting that the SEC drop its investigation into cryptocurrencies. A month later, members of venture capital firm Andreesen Horowitz held a cryptocurrency fundraiser on his behalf at Manhattan’s tony private club Zero Bond, perhaps best known for being Adams’ late-night favorite. The event was called the “Ritchie Torres Ethereum Fundraiser”; one invitation encouraged guests to donate in crypto.
In June, Adams came out strongly against a bill passed by the New York State Senate that would impose a two-year moratorium on new evidence of crypto mining operations because of their large carbon footprint. He urged Gov. Kathy Hochul to veto the bill.
Hochul is not. In November, after the bill was signed into law, Adams softened his stance on the bill.
There were plenty of resellers who unloaded cryptocurrencies on unwitting brands, getting rich in the process. Adams, to his credit, accepted and had real skin in the game. He, like many others, is poorer for it.