A trillion dollars in crypto currencies which wasn’t really a trillion dollars is now zero dollars, only days or weeks later.
Algorithmic stablecoin Terra which was, as the eponymous name implies guaranteed to be stable because it was pegged to Luna, another computer generated currency has dropped below $1 par, to 20¢ in fact. In an effort to support it, Luna issued more and more tokens, so many in fact that it dropped from a $60 par to 3/100ths of a penny in a week.
Coinbase recently IPOed at a valuation of almost $100 billion, it’s down to $18B.
It isn’t just crypto, of course. Meme stocks have taken a hit or cratered entirely. Robin Hood is down 85%, and poor lionized Cathie Woods Ark Innovation is off 74%.
The carnage isn’t limited to those flighty “new era” stocks either. Facebook is off, Netflix, PayPal, Lyft, Carvana, DraftKings, Beyond Meat and plenty more are downstairs remembering upstairs fondly, but distantly.
It stops when, as tne Wall Street Journal article notes, “it’s time for the puke.” That’s when the diehards finally capitulate, selling at any price in a vain attempt to get out of the way of even worse results.
Yes, there may be a dead at bounce along the way, and there will be relief rallies, and stalwarts will resist the tsunami, but for now crypto is down, some of it never to return. Likewise many stocks, though most will survive. Peloton is borrowing $750M just to keep its head above water. Bonds? Headed down as the Fed belatedly raises interest rates. Housing will cool, and with it refis which allowed homeowners to use their stick built piggy banks. Cash, if you hold it, will be down. Thanks inflation.
Remember TINA? There Is No Alternative? Now it’s TIN. There Is Nothing. Manage as best you can, this is probably not the time for the couch potato portfolio.
Bitcoin is almost as bs as fiat money. The key word is “almost”."
The funny thing is that fiat money, at least, has a government or a business behind it. And it has acceptance as “money” through most of the population. Crypto has neither.
However, when fiat currency has negative real interest, only a fool wouldn’t look elsewhere.
OK, but it would take a real fool to throw their money into something worse after looking, wouldn’t it?
In other news: Elon Musk will likely have the opportunity to buy Twitter at half the price he agreed to just days ago. He, of course, will use fiat money to complete the deal, assuming he does.