Here’s a simple question: Is moderate drinking okay?

Like millions of Americans, I look forward to a glass of wine—sure, occasionally two—while cooking or eating dinner. I strongly believe that an ice-cold pilsner on a hot summer day is, to paraphrase Benjamin Franklin, suggestive evidence that a divine spirit exists and gets a kick out of seeing us buzzed.

But, like most people, I understand that booze isn’t medicine. I don’t consider a bottle of California cabernet to be the equivalent of a liquid statin. Drinking to excess is dangerous for our bodies and those around us. Having more than three or four drinks a night is strongly related to a host of diseases, including liver cirrhosis, and alcohol addiction is a scourge for those genetically predisposed to dependency.

If the evidence against heavy drinking is clear, the research on my wine-with-dinner habit is a wasteland of confusion and contradiction. This month, the U.S. surgeon general published a new recommendation that all alcohol come with a warning label indicating it increases the risk of cancer. Around the same time, a meta-analysis published by the National Academies of Sciences, Engineering, and Medicine concluded that moderate alcohol drinking is associated with a longer life. Many scientists scoffed at both of these headlines, claiming that the underlying studies are so flawed that to derive strong conclusions from them would be like trying to make a fine wine out of a bunch of supermarket grapes.

I’ve spent the past few weeks poring over studies, meta-analyses, and commentaries. I’ve crashed my web browser with an oversupply of research-paper tabs. I’ve spoken with researchers and then consulted with other scientists who disagreed with those researchers. And I’ve reached two conclusions. First, my seemingly simple question about moderate drinking may not have a simple answer. Second, I’m not making any plans to give up my nightly glass of wine.

Alcohol ambivalence has been with us for almost as long as alcohol. The notion that booze is enjoyable in small doses and hellish in excess was captured well by Eubulus, a Greek comic poet of the fourth century B.C.E., who wrote that although two bowls of wine brought “love and pleasure,” five led to “shouting,” nine led to “bile,” and 10 produced outright “madness, in that it makes people throw things.”

In the late 20th century, however, conventional wisdom lurched strongly toward the idea that moderate drinking was healthy, especially when the beverage of choice was red wine. In 1991, Morley Safer, a correspondent for CBS, recorded a segment of 60 Minutes titled “The French Paradox,” in which he pointed out that the French filled their stomachs with meat, oil, butter, and other sources of fat, yet managed to live long lives with lower rates of cardiovascular disease than their Northern European peers. “The answer to the riddle, the explanation of the paradox, may lie in this inviting glass” of red wine, Safer told viewers. Following the report, demand for red wine in the U.S. surged.

[Read: America has a drinking problem]

The notion that a glass of red wine every night is akin to medicine wasn’t just embraced by a gullible news media. It was assumed as a matter of scientific fact by many researchers. “The evidence amassed is sufficient to bracket skeptics of alcohol’s protective effects with the doubters of manned lunar landings and members of the flat-Earth society,” the behavioral psychologist and health researcher Tim Stockwell wrote in 2000.

Today, however, Stockwell is himself a flat-earther, so to speak. In the past 25 years, he has spent, he told me, “thousands and thousands of hours” reevaluating studies on alcohol and health. And now he’s convinced, as many other scientists are, that the supposed health benefits of moderate drinking were based on bad research and confounded variables.

A technical term for the so-called French paradox is the “J curve.” When you plot the number of drinks people consume along an X axis and their risk of dying along the Y axis, most observational studies show a shallow dip at about one drink a day for women and two drinks a day for men, suggesting protection against all-cause mortality. Then the line rises—and rises and rises—confirming the idea that excessive drinking is plainly unhealthy. The resulting graph looks like a J, hence the name.

The J-curve thesis suffers from many problems, Stockwell told me. It relies on faulty comparisons between moderate drinkers and nondrinkers. Moderate drinkers tend to be richer, healthier, and more social, while nondrinkers are a motley group that includes people who have never had alcohol (who tend to be poorer), people who quit drinking alcohol because they’re sick, and even recovering alcoholics. In short, many moderate drinkers are healthy for reasons that have nothing to do with drinking, and many nondrinkers are less healthy for reasons that have nothing to do with alcohol abstention.

[Read: Not just sober-curious, but neo-temperate]

When Stockwell and his fellow researchers threw out the observational studies that were beyond salvation and adjusted the rest to account for some of the confounders I listed above, “the J curve disappeared,” he told me. By some interpretations, even a small amount of alcohol—as little as three drinks a week—seemed to increase the risk of cancer and death.

The demise of the J curve is profoundly affecting public-health guidance. In 2011, Canada’s public-health agencies said that men could safely enjoy up to three oversize drinks a night with two abstinent days a week—about 15 drinks a week. In 2023, the Canadian Centre on Substance Use and Addiction revised its guidelines to define low-risk drinking as no more than two drinks a week.

Here’s my concern: The end of the J curve has made way for a new emerging conventional wisdom—that moderate drinking is seriously risky—that is also built on flawed studies and potentially overconfident conclusions. The pendulum is swinging from flawed “red wine is basically heart medicine!” TV segments to questionable warnings about the risk of moderate drinking and cancer. After all, we’re still dealing with observational studies that struggle to account for the differences between diverse groups.

[Read: Is a glass of wine harmless? Wrong question.]

In a widely read breakdown of alcohol-health research, the scientist and author Vinay Prasad wrote that the observational research on which scientists are still basing their conclusions suffers from a litany of “old data, shitty data, confounded data, weak definitions, measurement error, multiplicity, time-zero problems, and illogical results.” As he memorably summarized the problem: “A meta-analysis is like a juicer, it only tastes as good as what you put in.” Even folks like Stockwell who are trying to turn the flawed data into useful reviews are like well-meaning chefs, toiling in the kitchen, doing their best to make coq au vin out of a lot of chicken droppings.

The U.S. surgeon general’s new report on alcohol recommended adding a more “prominent” warning label on all alcoholic beverages about cancer risks. The top-line findings were startling. Alcohol contributes to about 100,000 cancer cases and 20,000 cancer deaths each year, the surgeon general said. The guiding motivation sounded honorable. About three-fourths of adults drink once or more a week, and fewer than half of them are aware of the relationship between alcohol and cancer risk.

But many studies linking alcohol to cancer risk are bedeviled by the confounding problems facing many observational studies. For example, a study can find a relationship between moderate alcohol consumption and breast-cancer detection, but moderate consumption is correlated with income, as is access to mammograms.

One of the best-established mechanisms for alcohol being related to cancer is that alcohol breaks down into acetaldehyde in the body, which binds to and damages DNA, increasing the risk that a new cell grows out of control and becomes a cancerous tumor. This mechanism has been demonstrated in animal studies. But, as Prasad points out, we don’t approve drugs based on animal studies alone; many drugs work in mice and fail in clinical trials in humans. Just because we observe a biological mechanism in mice doesn’t mean you should live your life based on the assumption that the same cellular dance is happening inside your body.

[Read: The truth about breast cancer and drinking red wine—or any alcohol]

I’m willing to believe, even in the absence of slam-dunk evidence, that alcohol increases the risk of developing certain types of cancer for certain people. But as the surgeon general’s report itself points out, it’s important to distinguish between “absolute” and “relative” risk. Owning a swimming pool dramatically increases the relative risk that somebody in the house will drown, but the absolute risk of drowning in your backyard swimming pool is blessedly low. In a similar way, some analyses have concluded that even moderate drinking can increase a person’s odds of getting mouth cancer by about 40 percent. But given that the lifetime absolute risk of developing mouth cancer is less than 1 percent, this means one drink a day increases the typical individual’s chance of developing mouth cancer by about 0.3 percentage points. The surgeon general reports that moderate drinking (say, one drink a night) increases the relative risk of breast cancer by 10 percent, but that merely raises the absolute lifetime risk of getting breast cancer from about 11 percent to about 13 percent. Assuming that the math is sound, I think that’s a good thing to know. But if you pass this information along to a friend, I think you can forgive them for saying: Sorry, I like my chardonnay more than I like your two percentage points with a low confidence interval.

Where does this leave us? Not so far from our ancient-Greek friend Eubulus. Thousands of years and hundreds of studies after the Greek poet observed the dubious benefits of too much wine, we have much more data without much more certainty.

In her review of the literature, the economist Emily Oster concluded that “alcohol isn’t especially good for your health.” I think she’s probably right. But life isn’t—or, at least, shouldn’t be—about avoiding every activity with a whisker of risk. Cookies are not good for your health, either, as Oster points out, but only the grouchiest doctors will instruct their healthy patients to foreswear Oreos. Even salubrious activities—trying to bench your bodyweight, getting in a car to hang out with a friend—incur the real possibility of injury.

[Read: A daily drink is almost certainly not going to hurt you]

An appreciation for uncertainty is nice, but it’s not very memorable. I wanted a takeaway about alcohol and health that I could repeat to a friend if they ever ask me to summarize this article in a sentence. So I pressed Tim Stockwell to define his most cautious conclusions in a memorable way, even if I thought he might be overconfident in his caution.

“One drink a day for men or women will reduce your life expectancy on average by about three months,” he said. Moderate drinkers should have in their mind that “every drink reduces your expected longevity by about five minutes.” (The risk compounds for heavier drinkers, he added. “If you drink at a heavier level, two or three drinks a day, that goes up to like 10, 15, 20 minutes per drink—not per drinking day, but per drink.”)

Every drink takes five minutes off your life. Maybe the thought scares you. Personally, I find great comfort in it—even as I suspect it suffers from the same flaws that plague this entire field. Several months ago, I spoke with the Stanford University scientist Euan Ashley, who studies the cellular effects of exercise. He has concluded that every minute of exercise adds five extra minutes of life.

When you put these two statistics together, you get this wonderful bit of rough longevity arithmetic: For moderate drinkers, every drink reduces your life by the same five minutes that one minute of exercise can add back. There’s a motto for healthy moderation: Have a drink? Have a jog.

Even this kind of arithmetic can miss a bigger point. To reduce our existence to a mere game of minutes gained and lost is to squeeze the life out of life. Alcohol is not like a vitamin or pill that we swiftly consume in the solitude of our bathrooms, which can be straightforwardly evaluated in controlled laboratory testing. At best, moderate alcohol consumption is enmeshed in activities that we share with other people: cooking, dinners, parties, celebrations, rituals, get-togethers—life! It is pleasure, and it is people. It is a social mortar for our age of social isolation.

[Read: The anti-social century]

An underrated aspect of the surgeon general’s report is that it is following, rather than trailblazing, a national shift away from alcohol. As recently as 2005, Americans were more likely to say that alcohol was good for their health, instead of bad. Last year, they were more than five times as likely to say it was bad, instead of good. In the first seven months of 2024, alcohol sales volume declined for beer, wine, and spirits. The decline seemed especially pronounced among young people.

To the extent that alcohol carries a serious risk of excess and addiction, less booze in America seems purely positive. But for those without religious or personal objections, healthy drinking is social drinking, and the decline of alcohol seems related to the fact that Americans now spend less time in face-to-face socializing than any period in modern history. That some Americans are trading the blurry haze of intoxication for the crystal clarity of sobriety is a blessing for their minds and guts. But in some cases, they may be trading an ancient drug of socialization for the novel intoxicants of isolation.

In 2016, I was hired to teach skiing at the Park City resort, in Utah. The ultimate fun job: For one winter, I would get paid to do and share my favorite activity.

But I soon realized that although the piste conditions might be great, the working conditions were poor. An early clue was a training video that Vail Resorts, Park City’s owner, showed to employees. It bragged about how the company’s charity organization was helping local residents. The only problem: One of the charity cases was a Vail employee. In other words, the company was obliviously broadcasting how underpaid its own workers were.

That video came to mind last month when I heard that, starting December 27, Park City’s ski patrollers were going on strike to demand higher wages and better treatment. “We are asking all of you to show your support by halting spending at Vail Resorts properties for the duration of this strike,” the union said in an Instagram post. “Do not use Vail-owned rental shops or retail stores. Do not stay in Vail-owned hotels.”

For those unfamiliar with the industry, the union’s decision may have seemed puzzling. People who work on skis tend to love skiing, so why would they want to stop? They’re called ski bums, after all, not ski laborers. But for anyone who has been employed by Vail—and navigated the housing crises that plague resort communities—the union’s pleas are entirely comprehensible. The Park City strike illustrates just how distorted the American ski business has become, both for workers and for visitors. Central to the malaise is one trend: monopolization.

For much of skiing’s history, mountains were locally owned and operated. But over the past few decades, that has changed. In the 1990s, ski resorts began buying other ski resorts. Private-equity firms got in on the act. Soon, these conglomerates were gobbling up one another, creating a small clique of businesses that had control over the industry. Independent mountains still dot the country, but most major resorts now are either owned by or associated with one of two giant corporations: Vail and Alterra.

This consolidation is perhaps the main reason the sticker price of skiing, never cheap, has become exorbitant. With fewer competitors, Vail and Alterra have been free to jack up prices. In 2000, when Mount Snow (where I learned to ski) was owned by a smaller company, the cost of a day pass was about $93 in today’s dollars. Today, the Vail-owned resort charges approximately $150. The pricing at Park City is even steeper. Twenty-five years ago, you could get a three-day ticket for $308 in today’s dollars. Now you’re paying $850.

As a result, skiers tend to buy either Vail’s Epic Pass or Alterra’s Ikon Pass, season tickets that, depending on category, afford varying levels of access to a selection of the companies’ resorts (and, particularly for Ikon, of affiliated ones). These passes offer a better deal than day tickets; in some circumstances, they give better value than the season passes of earlier eras. But they also represent an intricate form of price discrimination filled with disadvantages. Skiers must purchase them before the winter begins. Many of the passes come with restrictions. And, as a lump sum, they’re hardly cheap: The Epic “Northeast Value Pass,” for example, is about $600, and has blackout dates on Vail’s marquee northeastern-U.S. properties. Only the full Epic Pass, priced at roughly $1,000, is limit free.

This new economic model means that visitors have fewer affordable ways to hit the slopes—especially if they ski only on an occasional basis. For instance, newbies may find themselves obliged to buy season passes just to spend a few days learning how to ski. The season-pass imperative also forces skiers of all levels to commit to one of two ecosystems, Epic or Ikon. This constrains people’s choice of where to ski, and makes planning trips with friends harder. What it does allow is conglomerates to keep people ensconced at company properties, buying overpriced food, lodging, and equipment.

Naturally, this strategy has worked well for both Vail and Alterra. Vail’s revenues have increased by 50 percent since my brief spell with the company in 2017. Alterra, a smaller company, is privately held and does not disclose its financials. But Big Ski’s business model works well enough at Alterra’s scale that, last year, it purchased a new ski area in Colorado for more than $100 million.

The system has not worked as well for staff, who remain underpaid. Vail set its minimum wage at $20 in March 2022, after facing staffing shortages and an earlier strike threat by ski patrollers. But that hourly figure is set against the extremely high cost of living in resort towns: In Park City, the median monthly rent is $3,500, which is about what a Vail minimum-wage employee makes working full-time. Meanwhile, Vail’s charity arm continues to brag about helping staff with “hardship relief.”

This is what happens when companies don’t have to compete for labor. Thanks to industry agglomeration, ski-resort workers have only a small number of potential employers, making it harder to switch jobs if they don’t like the way a particular resort treats them. And supervisors can afford to be high-handed. During my tenure, for example, instructors would sometimes have shifts added to their schedule without permission; at other times, they would have shifts canceled after arriving at work—meaning that they’d driven to the mountain only to get sent home without pay.

At the Park City resort, Vail owns a formidable collection of lodges and rental properties, but none of it was allocated to employees in my time. In 2022, the company began working with a separate development to help lease out discounted units for 441 of its staffers—but Vail has hundreds more employees at the resort, so those dormitories and apartments are nowhere near enough to make a very expensive town remotely affordable for most workers. In fact, according to a 2023 University of Utah study, only 12 percent of the community’s workforce live in Park City itself. This housing crisis is one of the main factors behind the strike. To help explain the picketing, Quinn Graves, one of the union’s officials, told New York magazine that most of his colleagues don’t live locally.

Most of the visitors who fly in to ski at Park City probably do not think much about these issues. They are, after all, there for a vacation, not for field research on economic injustice. But this season, they’ve had plenty of opportunity to ponder that: Because most of the resort closed during the patrollers’ strike, visitors had to wait in freezing lines for hours for brief runs down the few slopes Vail managed to keep open with supervisors and patrollers drafted from other mountains. Many of these guests, sick of Park City’s high costs, came down on the side of the strikers. Online, angry customers blasted Vail for refusing to give staff a raise. One person filed a lawsuit against the company in which he bemoaned how ski-ticket prices have risen “exponentially” over the past 10 years. In person, guests chanted “Pay your employees” while waiting to get on lifts.

On January 8, the company listened. It struck a deal to increase average pay for patrollers by $4 an hour and offer better leave policies. “This contract is more than just a win for our team,” Seth Dromgoole, the union’s lead negotiator, said in a statement. “It’s a groundbreaking success in the ski and mountain worker industry.” Other Park City employees, including instructors, have similarly cheered, hoping that the bump will eventually extend to them.

The outcome may encourage other ski-resort workers to organize. The idea of unionizing was bandied about by ski-school workers when I was there, and labor-organization rates have spiked at ski areas. The rationale is compelling: To get a fair deal in the face of corporate consolidation, workers may have to consolidate themselves.

For now, however, what’s on offer to skiers is governed by the unfortunate logic of mountains and monopolies. America has only so many ski areas, and as long as they’re controlled by a couple of conglomerates, the whole experience will continue to go downhill.

“The countdown clock on the next catastrophic crash has already started,” Dennis Kelleher, the president of the nonprofit Better Markets, told me.

In the past few weeks, I have heard that sentiment or similar from economists, traders, Hill staffers, and government officials. The incoming Trump administration has promised to pass crypto-friendly regulations, and is likely to loosen strictures on Wall Street institutions as well.

This will bring an unheralded era of American prosperity, it argues, maintaining the country’s position as the head of the global capital markets and the heart of the global investment ecosystem. “My vision is for an America that dominates the future,” Donald Trump told a bitcoin conference in July. “I'm laying out my plan to ensure that the United States will be the crypto capital of the planet and the bitcoin superpower of the world.”

[Annie Lowrey: The three pillars of the bro-economy]

Financial experts expect something different. First, a boom. A big boom, maybe, with the price of bitcoin, ether, and other cryptocurrencies climbing; financial firms raking in profits; and American investors awash in newfound wealth. Second, a bust. A big bust, maybe, with firms collapsing, the government being called in to steady the markets, and plenty of Americans suffering from foreclosures and bankruptcies.

Having written about bitcoin for more than a decade—and having covered the last financial crisis and its long hangover—I have some sense of what might cause that boom and bust. Crypto assets tend to be exceedingly volatile, much more so than real estate, commodities, stocks, and bonds. Egged on by Washington, more Americans will invest in crypto. Prices will go up as cash floods in. Individuals and institutions will get wiped out when prices drop, as they inevitably will.

The experts I spoke with did not counter that narrative. But if that’s all that happens, they told me, the United States and the world should count themselves lucky. The danger is not just that crypto-friendly regulation will expose millions of Americans to scams and volatility. The danger is that it will lead to an increase in leverage across the whole of the financial system. It will foster opacity, making it harder for investors to determine the riskiness of and assign prices to financial products. And it will do so at the same time as the Trump administration cuts regulations and regulators.

Crypto will become more widespread. And the conventional financial markets will come to look more like the crypto markets—wilder, less transparent, and more unpredictable, with trillion-dollar consequences extending years into the future.

“I have this worry that the next three or four years will look pretty good,” Eswar Prasad, an economist at Cornell and a former International Monetary Fund official, told me. “It’s what comes after, when we have to pick up the pieces from all the speculative frenzies that are going to be generated because of this administration’s actions.”

For years, Washington has “waged a war on crypto and bitcoin like nobody’s ever seen,” Trump told crypto entrepreneurs this summer. “They target your banks. They choke off your financial services … They block ordinary Americans from transferring money to your exchanges. They slander you as criminals.” He added: “That happened to me too, because I said the election was rigged.”

Trump is not wrong that crypto exists in its own parallel financial universe. Many crypto companies cannot or choose not to comply with American financial regulations, making it hard for kitchen-table investors to use their services. (The world’s biggest crypto exchange, Binance, declines even to name which jurisdiction it is based in; it directs American customers to a smallish U.S. offshoot.) Companies such as Morgan Stanley and Wells Fargo tend to offer few, if any, crypto products, and tend to make minimal, if any, investments in crypto and crypto-related businesses. It’s not so much that banks haven’t wanted to get in on the fun. It’s that regulations have prevented them from doing so, and regulators have warned them not to.

This situation has throttled the amount of money flowing into crypto. But the approach has been a wise one: It has prevented firm failures and crazy price swings from destabilizing the traditional financial system. Crypto lost $2 trillion of its $3 trillion in market capitalization in 2022, Kelleher noted. “If you had that big of a financial crash with any other asset, there would have been contagion. But there wasn’t, because you had parallel systems with almost no interconnection.”

Forthcoming regulation will knit the systems together. Granted, nobody knows exactly what laws Congress will pass and Trump will sign. But the Financial Innovation and Technology for the 21st Century Act, or FIT21, which passed the House before dying in the Senate last year, is a good guide. The law was the subject of intense lobbying by crypto advocates with billions on the line and cash to spend, including $170 million on the 2024 election. It amounts to an industry wish list.

FIT21 makes the Commodity Futures Trading Commission, rather than the Securities and Exchange Commission, the regulator of most crypto assets and firms and requires that the CFTC collect far less information from companies on the structure and trading of crypto products than securities firms give the SEC.

[Annie Lowrey: The Black investors who were burned by Bitcoin]

Beyond loose rules, financial experts anticipate loose enforcement. The CFTC predominantly oversees financial products used as hedges by businesses and traded among traders, not ones hawked to individual investors. It has roughly one-fifth the budget of the SEC, and one-seventh the staff. And in general, Washington is expected to loosen the strictures preventing traditional banks from keeping crypto on their books and preventing crypto companies from accessing the country’s financial infrastructure.

According to Prasad, this regime would be a “dream” for crypto.

Trump and his family are personally invested in crypto, and the president-elect has floated the idea of establishing a “strategic” bitcoin reserve, to preempt Chinese influence. (In reality, this would mean deploying billions of dollars of taxpayer money to soak up speculative assets with no strategic benefit to the United States.) How many Republicans will invest in crypto because Trump does? How many young people will pour money into bitcoin because his son Eric says its price is zooming toward $1 million, or because the secretary of commerce says it is the future?

Nothing being considered by Congress or the White House will reduce the inherent risks. Crypto investors will remain vulnerable to hacking, ransomware, and theft. The research group Chainalysis tallied $24.2 billion in illicit transactions in 2023 alone. And if the U.S. government invests in crypto, the incentive for countries such as Iran and North Korea to interfere in the markets would go up exponentially. Imagine China engaging in a 51 percent attack on the bitcoin blockchain, taking it over and controlling each and every transaction. The situation is a security nightmare.

Americans will be exposed to more prosaic scams and rip-offs too. The SEC has brought enforcement actions against dozens of Ponzi schemers, charlatans, and cheats, encompassing both the $32 billion sham-exchange FTX and ticky-tacky coin firms. Nobody expects the CFTC to have the muscle to do the same. And FIT21 leaves loopholes open for all kinds of scuzzy profiteering. A crypto firm might be able to run an exchange, buy and sell assets on its own behalf, and execute orders for clients—legally, at the same time, despite the conflicts of interest.

Simple volatility is the biggest risk for retail investors. Crypto coins, tokens, and currencies are “purely speculative,” Prasad emphasized. “The only thing anchoring the value is investor sentiment.” At least gold has industrial uses. Or, if you’re betting on the price of tulip bulbs, at least you might end up with a flower.

With crypto, you might end up with nothing, or less. A large share of crypto traders borrow money to make bets. When leveraged traders lose money on their investments, their lenders—generally the exchange on which the traders are trading—require them to put up collateral. To do that, investors might have to cash out their 401(k)s. They might have to dump their bitcoin, even in a down market. If they cannot come up with the cash, the firm holding their account might liquidate or seize their assets.

A report released last month by the Office of Financial Research, a government think tank, makes clear just how dangerous this could be: Some low-income households are “using crypto gains to take out new mortgages.” When crypto prices go down, those families’ homes are going to be at risk.

Many individual investors do not seem to understand these perils. The Federal Deposit Insurance Corporation has had to warn the public that it does not protect crypto assets. The Financial Stability Oversight Council has raised the concern that people do not realize that crypto firms are not subject to the same oversight as banks. But if Trump is invested, how bad could it be?

Regulators and economists are not worried primarily about the damage that this new era will do to individual households, however. They are worried about chaos in the crypto markets disrupting the traditional financial system—leading to a collapse in lending and the need for the government to step in, as it did in 2008.

Where Wall Street once saw fool’s gold, it now sees a gold mine. Ray Dalio of Bridgewater called crypto a “bubble” a decade ago; now he thinks it is “one hell of an invention.” Larry Fink of BlackRock previously referred to bitcoin as an “index of money laundering”; today he sees it as a “legitimate financial instrument”—one his firm has already begun offering to clients, if indirectly.

Early in 2024, the SEC began allowing fund managers to sell certain crypto investments. BlackRock launched a bitcoin exchange-traded fund in November; one public retirement fund has already staked its pensioners’ hard-earned cash. Barclays, Citigroup, JPMorgan, and Goldman Sachs are doing crypto deals too. Billions of traditional-finance money is flowing into the decentralized-finance markets, and billions more will as regulators allow.

[Charlie Warzel: Crypto’s legacy is finally clear]

What could go wrong? Nothing, provided that Wall Street firms are properly accounting for the risk of these risky assets. Everything, if they are not.  

Even the sturdiest-seeming instruments are dangerous. Stablecoins, for example, are crypto assets pegged to the dollar: One stablecoin is worth one dollar, making them useful as a medium of exchange, unlike bitcoin and ether. Stablecoin companies generally maintain their peg by holding one dollar’s worth of super-safe assets, such as cash and Treasury bills, for every stablecoin issued.

Supposedly. In the spring of 2022, the widely used stablecoin TerraUSD collapsed, its price falling to just 23 cents. The company had been using an algorithm to keep TerraUSD’s price moored; all it took was enough people pulling their money out for the stablecoin to break the buck. Tether, the world’s most-traded crypto asset, claims to be fully backed by safe deposits. The U.S. government found that it was not, as of 2021; moreover, the Treasury Department is contemplating sanctioning the company behind tether for its role as a cash funnel for the “North Korean nuclear-weapons program, Mexican drug cartels, Russian arms companies, Middle Eastern terrorist groups and Chinese manufacturers of chemicals used to make fentanyl,” The Wall Street Journal has reported. (“To suggest that Tether is somehow involved in aiding criminal actors or sidestepping sanctions is outrageous,” the company responded.)

Were tether or another big stablecoin to falter, financial chaos could instantly spread beyond the crypto markets. Worried investors would dump the stablecoin, instigating “a self-fulfilling panic run,” in the words of three academics who modeled this eventuality. The stablecoin issuer would dump Treasury bills and other safe assets to provide redemptions; the falling price of safe assets would affect thousands of non-crypto firms. The economists put the risk of a run on tether at 2.5 percent as of late 2021—not so stable!

Other catastrophes are easy to imagine: bank failures, exchange collapses, giant Ponzi schemes faltering. Still, the biggest risk with crypto has little to do with crypto at all.

If Congress passes FIT21 or a similar bill, it would invent a novel asset class called “digital commodities”—in essence, any financial asset managed on a decentralized blockchain. Digital commodities would be exempted from SEC oversight, as would “decentralized finance” firms. In the FIT21 bill, any firm or person can self-certify a financial product as a digital commodity, and the SEC would have only 60 days to object.

This is a loophole big enough to fit an investment bank through.

Already, Wall Street is talking up “tokenization,” meaning putting assets on a programmable digital ledger. The putative justification is capital efficiency: Tokenization could make it easier to move money around. Another justification is regulatory arbitrage: Investments on a blockchain would move out of the SEC’s purview, and likely be subject to fewer disclosure, reporting, accounting, tax, consumer-protection, anti-money-laundering, and capital requirements. Risk would build up in the system; the government would have fewer ways to rein firms in.

Crypto regulation could end up undermining the “broader $100 trillion capital markets,” Gary Gensler, the soon-to-be-former head of the SEC and the crypto industry’s enemy No. 1, has argued. “It could encourage noncompliant entities to try to choose what regulatory regimes they wish to be subjected to.”

[Annie Lowrey: When the Bitcoin scammers came for me]

We have seen this movie before, not long ago. In 2000, shortly before leaving office, Bill Clinton signed the Commodity Futures Modernization Act. The law put strictures on derivatives traded on an exchange, but left over-the-counter derivatives unregulated. So Wall Street ginned up trillions of dollars of financial products, many backed by the income streams from home loans, and traded them over the counter. It packaged subprime loans with prime loans, obscuring a given financial instrument’s real risk. Then consumers strained under rising interest rates, crummy wage growth, and climbing unemployment. The mortgage-default rate went up. Home prices fell, first in the Sun Belt and then nationwide. Investors panicked. Nobody even knew what was in all of those credit-default swaps and mortgage-backed securities. Nobody was sure what anything was worth. Uncertainty, opacity, leverage, and mispricing spurred the global financial crisis that caused the Great Recession.

The crypto market today is primed to become the derivatives market of the future. Were Congress and the Trump administration to do nothing—to leave the SEC as crypto’s primary regulator, to require crypto companies to play by the existing rules—the chaos would remain walled off. There’s no sensible justification for digital assets to be treated differently than securities, anyway. By the simple test the government has used for a century, nearly all crypto assets are securities. But Washington is creating loopholes, not laws.

As the crypto boosters like to say, hold on for dear life. “A lot of bankers, they’re dancing in the street,” Jamie Dimon of JPMorgan Chase said at a conference in Peru last year. Maybe they should be. The bankers are never the ones left holding the bag.

Rarely does a labor fight facilitate such rich, obvious imagery, but the Park City strike provided: A disgusted Twitter user's camera shows a cluster of skiers massing at the base of a lift, huddled in at a density instantly identifiable even to the non-skier as oversaturated; as the shot pans left, we see the lift is running parallel to the cameraperson, establishing that they are not even in that clogged main line, but in fact waiting to enter its maw; finally, the up-mountain angle shows they're lucky to at least be in the front of this auxiliary line, as there are several dozen people behind them, spanning the length of cable between two support poles. Conditions, naturally, are incredible. All that new snow, and no way to get onto it.

It becomes very clear upon watching this clip or any of the others like it that Park City Mountain Resort cannot function without its ski patrol workers, and that the resort's owner, Vail Resorts, views both its labor force and clientele with scorn and indifference. The ongoing strike in Park City is, like any labor dispute, a discrete fight between two parties over the permissible parameters of exploitation. But it is also a fracture, a break caused by the overwhelming pressure of extractivism's ruthless logic applied past the breaking point of rationality. The long lines and the testimonies of strikebreaking skiers who had to get rescued by cut-rate scab ski patrollers are the clearest and most visually striking representations of what happens when a service-based industry is held hostage by capital until it can no longer operate as such.