Posted on 01/09/2022 6:15:42 PM PST by BenLurkin
The alleged catalyst for the change has been the looming Fed rate hikes...
A few of the bubbles bursting:
Crypto: Crypto assets are suffering crashes the likes of which would be considered cataclysmic in general markets. Bitcoin is down nearly 40% from its highs; Ethereum is down 34%. More colorful (yet less commanding) names like Polkadot are down 50%. Crypto has seen such crashes before and may well rise from the ashes in a nanosecond. But as I wrote recently, you can’t value crypto so there’s no logical basis to own it. It is a classic speculative gamble. And such things usually end badly.
Momentum Growth Stocks with Negative Returns on Capital: Perhaps the biggest fad of the past two years has been buying stocks that have captured the public’s pandemic imagination. In aggregate these companies have -5.09% returns on invested capital (ROIC = earnings/invested capital), a sure sign they are destroying shareholder value. These stocks are exemplified by ETFs such as Ark Innovation (ARKK) ARKK -1.4% which owns everything from Teladoc TDOC +0.5% to Roku, both of which are down more than 40% over the past year. Buying a basket of such businesses is the height of speculation.
Meme Stocks: Yet even more absurd are meme stocks, garbage companies that shot to the moon on the back of a tweet. The leader of this madness, AMC (AMC), is down 39% over the past three months. Over $80 billion in market capitalization has been wiped out since the highs. Meme stocks are the ultimate exercise of what’s called the “greater fool theory,” the belief that you should buy a stock because it’s going up on the prayer that a greater fool than you will eventually take it off your hands for the same reason.
(Excerpt) Read more at forbes.com ...
Well first the disclaimers. I’m not a financial advisor or crypto currency expert. What I think of his statement is that he is more or less clueless when it comes to crypto. One of the most attractive characteristics of the crypto market is the fed really has no influence and thus can’t manipulate the market to the advantage of their wall street pals. Thus rising interest rates and inflation are reasons to increase holdings of crypto not run from it. The pullback in crypto is likely caused by many things, some of which may be tax related, general political uncertainty and mostly the fact that the crypto markets are still very much in their infancy so volatility is a given.
My overall outlook for crypto at the moment is this is a good buying opportunity. Buy and hold.
And these are the “investment” guys who tell you that You should still be pumping money into stocks that have been up how much over the past four years?
It’s all risky. It’s all going to be hurting.
The “higher education” bubble needs to burst and crash so it can be rebuilt into an actual education system.
I still am a buyer of btc, it is a way to get around the financial bans going on, driving the speculators out of the market is good for me.
I support btc not for investment, but for freedom.
Fadish Crypto is just another extraordinary popular delusion in a long line of such.
Not yet and the retail traders have upped the anti by DRSing (direct registration system) their shares in their name. If you leave the shares with a broker the broker can loan them out to the short sellers.
Speculation is that the hedge funds continue their shorting and have been engaged in naked short selling. I can't confirm any of this. As a disclaimer this is not financial advise.
To fuel the speculation and the conspiracy theories GME recently shot up in after hours trading. This led to business news organizations to report GameStop's plans of creating an NFT marketplace when no press release had been sent out by GameStop. GameStop had set up a preliminary registration site for content creators that went unnoticed by the press 3 weeks ago. Which is kind of fake news when you think about it.
Not that you asked for all that information but I thought someone might be interested.
Amen!
The crypto market is risky, volatile and has so far been very profitable.
After examining it I believe the blockchain tech has value and can be useful for different purposes but Crypto itself remains, in essence, used electricity.
I wish good luck to those speculating in Crypto but feel the day will come when it will go the way of Tulip bulbs.
That is not to say there isn’t a place for digital currencies in the future. The current clutch of Crypto, however, is based on nothing but the idea of Crypto having value.
A fair counter to that is the same is true with “fiat money”, but it’s not a fair comparison when it comes to first world currencies. Zimbabwe? Sure.
You need to study much more on this subject. Various crypto tokens are essentially shares in projects which do various useful things. Bitcoin is one of the few that is only intended to be a currency and which doesn’t have much underlying use.
Translation: Naked shorting by hedge funds still hurting them. Please sell your shares.
Unlike Dogecoin, I presume.
Yes Dogecoin and Shiba Inu are worthless meme coins that don’t actually do anything.
I was referring to the top projects which tend to be L1 Blockchains like Ethereum, Cosmos, Solana, Polkadot, Cardano, Avalanche, Terra, Algorand or L2 scaling solutions like Polygon or Loopring. Or they are specialized like XRP (transfers/remittance payments), or Metaverse projects like Sandbox and Decentraland, or Chainlink which bridges all of them or any of a ton of gaming projects, or Audius which allows fans and music bands to directly connect and allows bands to publish their content to fans without the need for a record company, etc.
There are lots of projects like this which do have technology that have real world use cases. Its not all just a scam or ponzi scheme like some who don’t understand blockchain technology claim. There is a reason institutional investors have started pouring money into crypto in the last year.
I agree there are bubbles. I have a lot of money on the sidelines waiting for them to pop. But I’m just saying if the article doesn’t understand the hedge fund shorts and wall street bets then they aren’t worth listening to.
I believe PirateChain and Monero will have a place as well. Those are not really traceable by the feds where as all the others are. They are more fungible (like cash).
Hackers that want to get paid in bitcoin are stupid. THey should demand getting paid in piratechain or at least monero.
Just don’t conflate the blockchain tech, which I see as having many uses, with Crypto per se.
It's a way to sound forward thinking while torpedoing the real threat to power, which is a decentralized, non-central bank controlled medium of exchange and store of value.
The blockchain is critical as a decentralized and unhackable tool for tracking the movement of value for something like Bitcoin, but it's hopelessly insecure, inefficient, and power hungry, and not relevant to much else. Why would anyone store anything of value on a blockchain, other than cryptocurrency tracking?
The digital contracts foundation of Ethereum and the ERC-20 tech standard is interesting, but even that isn't fully decentralized.
“ It’s a way to sound forward thinking while torpedoing the real threat to power, which is a decentralized, non-central bank controlled medium of exchange and store of value.”
To be a store of value it must have value beyond that which is given it by it’s proponents. Crypto does not.
It’s also a store of value across space, since I don’t have to physically store it or transport it (or pay for its storage or transport). Its value exists as long as I have access to my wallet and my pass phrase, and it maintains its value year after year.
Even at a near 50% drop since its high, it still worth 10% more than it was a year ago, and 400% more than it was worth 2 years ago.
“Bitcoin is a store of value because it stores value across time.”
Is that something you heard & repeated or just made up? In either case, read it back to yourself a few times and see if it makes sense to you.
Your definition as something that must "have value beyond that which is given it by its proponents", which is an idea unique to your imagination.
A store of value is essentially an asset, commodity, or currency that can be saved, retrieved, and exchanged in the future without deteriorating in value. In other words, to enter this category, the item acquired should, over time, either be worth the same or more.
Understanding a Store Of Value
Feel free to explain how this doesn't apply to Bitcoin.
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