So, the price of bitcoin and other cryptocurrencies have taken hit once again.

I’m not surprised at how things have turned out. I can say that I’m kind of glad that the vindication in my view that it’s a mania has come so quick but who knows, bitcoin and other coins could easily bounce back up 50% from here.

Some signs that cryptos as asset (*cough cough) have been been much too popular of late:

  • A colleague and I are supposed to give a presentation for the economic and financial aspects of cryptos tomorrow.**
  • I recently heard (from two different sources, no less!) that Singaporean civil servants have been punting on cryptos.*** It’s literally a punt because these people are just putting in a few hundred to a few thousand dollars, at best and monitoring the prices a few times a day.
  • Bitcoin and strip club? Anyone remember the days before the GFC when bankers were throwing parties in Las Vegas?
  • Lastly, anyone remember this guy? I was just telling my colleagues how people like Roubini and John Paulson have fallen off the radar since the GFC. It’s quite telling that the bears have been mostly forgotten which shows how positive it’s been for investor sentiments.****

I’m not saying that financial markets are any safer but let’s not deny how overhyped cryptos were in 3Q and 4Q of last year. If cryptos were in a bubble and that bubble has now burst, then I suspect the prices of cryptos should have a lot more room to fall.

Notes:

*Any sound financial advisor wouldn’t advise his/her client to take this on in a portfolio in a huge way.

**When Singaporean pseudo-academia is interested in something, it should set alarm bells ringing.

***These aren’t public servants who have any expertise in the matter by the way. They probably have no idea what’s the difference between each coin and at the moment, it’s not like the differences matter much anyway. If more than a handful of public servants are into something, it’s probably the end of the party.

****Even the latest drop in the financial markets (minor relatively to history) are being framed as a good thing. That’s how positive things are right now.

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