Weekly Market Pulse: Live From New York

We have reached the point of absurdity in the crypto markets. There were people buying Dogecoin last week in anticipation of Elon Musk’s appearance on Saturday Night Live, with the expectation, presumably, that he would say something bullish and they’d be able to ring the cash register. Easy, peasy, cha ching. Except, well, at last check it didn’t work out that way. Musk at some point in the telecast called Dogecoin a “hustle” which is derogatory to dances from the disco era but otherwise pretty accurate. Doge promptly did a header over the weekend although as crazy as that market is I wouldn’t be surprised at all if it was higher by the time you read this. By the way, if, according to Musk, Dogecoin is a hustle, what does that make Musk? Hustler in chief? What about Mark Cuban? Both of these celebrity businessmen (and make no mistake, celebrity is the important word in that phrase) have been promoting Dogecoin on social media. Or maybe they’ve just been joking but only people with a net worth that looks like a phone number are in on the joke. My question is this: where are the regulators? Yes, Dogecoin is a joke and Musk may well have been joking all along but real people are going to lose money. Preventing fraudulent investment schemes – and promoting a joke cryptocurrency on social media when you are a major holder goes well beyond “talking your book” in my mind – would seem to be something regulators might find of interest. Alas, the SEC is busy at the moment investigating whether Volkswagen’s April fool’s joke about changing their name to Voltswagen caused any investor harm. As I seem to say every day, you have got to be kidding me. Talk about missing the forest for the trees…..

I happen to believe that crypto/blockchain/DeFi has a bright future. I also happen to believe that bright future is probably much further away than today’s boosters believe. I also believe that the blockchain applications that change the world will likely concern mundane things with the potential to finally move the needle on productivity growth. But I’ve been around the block more than once with “bubbles” or whatever you want to call the thing that happens to new, exciting and previously unknown assets. I saw it with biotech in the early 90s when anything with bio in the name went up. I saw it in the late 90s when anything with dot com in the name went up. And I saw it again in the mid-00s when real estate in places where no human should want or need to live went up. And we’re seeing it again today when anything that can be vaguely identified with crypto goes up. My approach to all those manias or whatever you want to call them was the same. I waited for the crash and picked through the debris to see what was worth salvaging and took my time buying it. I plan to do exactly the same thing again when all the crypto assets crash. They will and when they do the good ones will go down with the Doges. And my guess is that the big one hasn’t been created yet, that it will come after the crash. I could be wrong but I’d just remind you that Facebook and a whole bunch of other big winners weren’t around when dot com went splat.

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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