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Really today its crypto? The tiny market and not the massively overpriced tech stocks trading way way above earnings. They have just slightly corrected from the

by bogota 4y ago

Really today its crypto? The tiny market and not the massively overpriced tech stocks trading way way above earnings. They have just slightly corrected from the covid mania but many are still trading at ridiculous multiples that everyone justifies with “they will keep growing”

bruce511 4y ago
Not exclusively crypto, but when I see adverts for crypto on TV, and hear it pitched over radio, then I wonder. At that point it's appealing to the least sophisticated investors, which to me is the first signal of a bubble. The nature of a ponzi scheme is that it starts small, but then has to appeal to an ever larger group. This ends with mass advertising to reach the biggest group of all. Then what? Couple this with the tone. Crypto is being marketed as an investment, not as a utility, not as a currency. Its sole appeal is "it will go up". Crypto itself is mostly a solution looking for a (legal) problem. While the killer app is facilitating illegal activity (which has some value for moral, but illegal activity - alas a minority of the actual use case) that's a hard sell. Finding a legal killer app though is proving elusive. Most things it _can_ do are already done better/faster/cheaper/simpler another way. Of course it has some utility, but nowhere near the hype levels. Tech stocks - yes, they are high, and will likely correct some. But apple, Google, Microsoft, amazon, Facebook and friends are all generating huge amounts of revenue and profit. Their stock values are massive, but their profit levels are unprecedented. Startups get a lot if attention, but from VCs which is not public money, and not traded to the public, so is a different kind of bubble, unrelated to the 1929 depression etc.
- actually_a_dog 4y ago
  You may be on to something here. JFK's father, Joe Kennedy, famously got out of the stock market before the 1929 crash after the kid shining his shoes gave him stock market tips. That's pretty much the equivalent of TV and radio ads for crypto.
- Shorel 4y ago
  Every time someone says cryptocurrencies are 'a bubble' I know they are not paying attention. Or for some reason think there is going to be a single event that will finally end cryptocurrencies. Or they have an agenda and want them to end. It's not a single bubble, that stuff happened several times already. They lost more than 50% of their value in a short amount of time, several times already. It's a boiler. Its periodic bubbles, over and over again. Price fluctuations, slow climbing, then fast climbing, then it goes down, repeats. It has happened already, and it will be happening again and again. Every time you will be watching, thinking: this time, this is 'the big bubble' and it will burst and cryptocurrencies will be no more. Except they will continue boiling, prices will go up and down, and you will have to wait for the next time.
  - rippercushions 4y ago
    I don't think anybody is expecting cryptocurrencies as a whole to cease to exist. I do think a lot of people, including myself, see the current turmoil in the market as only a precursor to what will happen if/when Tether implodes and a whole lot of funny money is suddenly sucked out of the system. In crypto history terms, this would be a Mt Gox level event, which crashed prices by over 80%: https://en.wikipedia.org/wiki/Mt._Gox#/media/File:Bitcoin_exchange_mtgox_-_Feb2012-Feb2014_-_log_scale.png https://en.wikipedia.org/wiki/Mt._Gox#/media/File:Bitcoin_ex... (log scaled)
    - Shorel 4y ago
      Exactly. I expect that to happen to tether eventually, just because of inflation. There's also the probability of a 'flippening' event in the future, because ETH is no longer PoW. So ETH would switch to be the #1 currency. Or maybe not. But the cat is out of the bag, and cryptocurrencies are here to stay, and I would even say in any four year period they will still gain more than any other kind of asset for the foreseeable future.
  - bruce511 4y ago
    I agree that it's bubble and bursted several times. The key part of the rescue though is bringing in new money with another level of investors. The current level seems to be pitched at "everyone". After that there's not much place to go. There are some territories currently excluded and they may come into the fold, but probably won't. The root problem is that it's utility is limited, and as yet has not found a way to grow that utility in proportion to its overall growth. By contrast a stock like say apple seems (and may be) bonkers, but apple has shown consistent utility growth. They improve sales by appealing to more market. People by an iPhone to use it, not to keep it and sell it for more. Of course crypto may not crash. Red flags don't mean certain collapse. They are, after all, just red flags.
Phurist 4y ago
That's what they keep saying throughout history, yet it seems that tech industry as a whole just wants to reach these highs over and over again. I wonder why ? Could it be because it's the superior business case, which can reach global markets at ease ? Oh noo... noo how can that be... my wood workshop in Agbogbloshie Dumpsite, Ghana has the best business model known to mankind, how can it be that it can not compete with BigTechCorpo123 ? Oh.. I don't know... maybe because BigTechCorpo123 can sell their product to the whole world at ease while your wood toys have to be shipped by vans ?

by bogota 4y ago

bruce511 4y ago

Not exclusively crypto, but when I see adverts for crypto on TV, and hear it pitched over radio, then I wonder. At that point it's appealing to the least sophisticated investors, which to me is the first signal of a bubble. The nature of a ponzi scheme is that it starts small, but then has to appeal to an ever larger group. This ends with mass advertising to reach the biggest group of all. Then what? Couple this with the tone. Crypto is being marketed as an investment, not as a utility, not as a currency. Its sole appeal is "it will go up". Crypto itself is mostly a solution looking for a (legal) problem. While the killer app is facilitating illegal activity (which has some value for moral, but illegal activity - alas a minority of the actual use case) that's a hard sell. Finding a legal killer app though is proving elusive. Most things it _can_ do are already done better/faster/cheaper/simpler another way. Of course it has some utility, but nowhere near the hype levels. Tech stocks - yes, they are high, and will likely correct some. But apple, Google, Microsoft, amazon, Facebook and friends are all generating huge amounts of revenue and profit. Their stock values are massive, but their profit levels are unprecedented. Startups get a lot if attention, but from VCs which is not public money, and not traded to the public, so is a different kind of bubble, unrelated to the 1929 depression etc.

actually_a_dog 4y ago
You may be on to something here. JFK's father, Joe Kennedy, famously got out of the stock market before the 1929 crash after the kid shining his shoes gave him stock market tips. That's pretty much the equivalent of TV and radio ads for crypto.
Shorel 4y ago
Every time someone says cryptocurrencies are 'a bubble' I know they are not paying attention. Or for some reason think there is going to be a single event that will finally end cryptocurrencies. Or they have an agenda and want them to end. It's not a single bubble, that stuff happened several times already. They lost more than 50% of their value in a short amount of time, several times already. It's a boiler. Its periodic bubbles, over and over again. Price fluctuations, slow climbing, then fast climbing, then it goes down, repeats. It has happened already, and it will be happening again and again. Every time you will be watching, thinking: this time, this is 'the big bubble' and it will burst and cryptocurrencies will be no more. Except they will continue boiling, prices will go up and down, and you will have to wait for the next time.
- rippercushions 4y ago
  I don't think anybody is expecting cryptocurrencies as a whole to cease to exist. I do think a lot of people, including myself, see the current turmoil in the market as only a precursor to what will happen if/when Tether implodes and a whole lot of funny money is suddenly sucked out of the system. In crypto history terms, this would be a Mt Gox level event, which crashed prices by over 80%: https://en.wikipedia.org/wiki/Mt._Gox#/media/File:Bitcoin_exchange_mtgox_-_Feb2012-Feb2014_-_log_scale.png https://en.wikipedia.org/wiki/Mt._Gox#/media/File:Bitcoin_ex... (log scaled)
  - Shorel 4y ago
    Exactly. I expect that to happen to tether eventually, just because of inflation. There's also the probability of a 'flippening' event in the future, because ETH is no longer PoW. So ETH would switch to be the #1 currency. Or maybe not. But the cat is out of the bag, and cryptocurrencies are here to stay, and I would even say in any four year period they will still gain more than any other kind of asset for the foreseeable future.
- bruce511 4y ago
  I agree that it's bubble and bursted several times. The key part of the rescue though is bringing in new money with another level of investors. The current level seems to be pitched at "everyone". After that there's not much place to go. There are some territories currently excluded and they may come into the fold, but probably won't. The root problem is that it's utility is limited, and as yet has not found a way to grow that utility in proportion to its overall growth. By contrast a stock like say apple seems (and may be) bonkers, but apple has shown consistent utility growth. They improve sales by appealing to more market. People by an iPhone to use it, not to keep it and sell it for more. Of course crypto may not crash. Red flags don't mean certain collapse. They are, after all, just red flags.

Phurist 4y ago

That's what they keep saying throughout history, yet it seems that tech industry as a whole just wants to reach these highs over and over again. I wonder why ? Could it be because it's the superior business case, which can reach global markets at ease ? Oh noo... noo how can that be... my wood workshop in Agbogbloshie Dumpsite, Ghana has the best business model known to mankind, how can it be that it can not compete with BigTechCorpo123 ? Oh.. I don't know... maybe because BigTechCorpo123 can sell their product to the whole world at ease while your wood toys have to be shipped by vans ?