This is tautological. You’re essentially arguing that market participants can’t be stupid or wrong or credulous, ever. In the South Sea Bubble people speculate

This is tautological. You’re essentially arguing that market participants can’t be stupid or wrong or credulous, ever. In the South Sea Bubble people speculated on the value of a company that basically never even started business in its market and had no hope of a profit. Ponzi’s scheme was mail reply coupons, which could never have worked even in theory. The Mississipi company in France flourished despite the abject failure of the underlying Mississipi company to establish itself or a colony. People can be very wrong. And indeed in crypto you regularly hear such stupid beliefs as “Tether is only $60 billion and crypto has a market cap or $1 trillion, so it’s just a tiny risk”* The fact that this is a common belief suggests that you’re wrong. People may correctly think Tether is a fraud but have an extremely incorrect belief about the consequences of Tether being a fraud. Just as people understood people with no incomes couldn’t afford mortgages once teaser rates expired but did not understand how that would richochet through the system. *The error is that unlike a company, no one would ever buy all the crypto outright, and market cap is a meaningless term. An injection of $1.5 billion from Tesla was enough to send crypto markets skyrocking. What would a subtraction of fiat 40x as large do to markets?