Yes, only several times worse.

A random guy that self-taught himself PHP, for example, is not usually found (or even allowed) to build one of the biggest exchanges for developing markets. For Bitcoin though, they do.

in fact, "I know PHP! How hard could running an exchange be?" is literally the process by which Mt. Gox and Bitcoinica - whose stolen code was pressed into service as the first version of Bitfinex - came into being.

Exchanges like Coinbase and Gemini are much more professional.

They're not being pitched to suburban mums and dads in the tabloids.

Then it sounds like your argument should just be "this is too risky for more than a tiny investment unless you're very secure," which I agree with.

Where I part ways is in your claim that the price is somehow illusory and it's impossible to cash out. Until recently I worked for a company that was mostly paid in crypto, and had no trouble selling it off, moving the money into a bank, and meeting payroll.

Crypto is new and the market infrastructure is immature; that means there's more risk, and also more return, just like the early days of other new asset classes that have arisen over the past century. William Bernstein wrote about this in his recent Investing for Adults series.

How recently is “recently”? It seems (to me as an outside observer) that it’s gotten notably harder to get national-currency money out of exchanges in the last, say, 6 months, because (I’m guessing) as the price goes on an upward run, more people who bought low are trying to sell to realize those gains, which triggers higher transaction volume, which suddenly prompts correspondent banks to look at exactly what all this money moving around is — at which point AML/KYC processes kick in and some banks decide the relationship with the exchange is too risky.

Didn’t one of the major crypto exchanges recently lose all its correspondents for awhile and then picked up a single one again?

I resigned about a month ago.

Coinbase and Gemini, for example, are U.S. exchanges that strictly follow money transmission regulations and AML/KYC. They're not likely to have banking problems, at least under the current regime. If you go with a sketchy foreign exchange so you can stay anonymous, you're more likely to run into problems.

Yep. In fact, Gemini's value proposition is that it's as rules-following and upright as a crypto exchange can be - they want to market to serious money who aren't interested in cowboy exchanges.

Unfortunately, this has left them with much lower volumes than the more cowboy exchanges ...

I'd definitely concur that your first paragraph holds. Having a flutter is one thing. Buy £5 of ether on Coinbase, see what happens! Investing seriously, OH DEAR GOD NO.

The motivation for this is that I keep hearing from friends asking "help, [relative] thinks bitcoins are a good idea! what do I do?" So instead of abstruse jargon-laden blockchain inside baseball posts, I tried to write something more accessible about the problems.

I was recently looking into stocks and shares ISAs and which index funds are best, and I can safely say that emerging market funds are very definitely being pitched to suburban mums and dads in the tabloids. Meanwhile, they're running articles about Bitcoin being a bubble and a huge scam. What I'm saying is, your claim about what the tabloids are convincing people to invest in doesn't seem terribly founded.