Blow-Off Top, Again! (Part 1)

Crypto currencies are not a new money aborning!

They are just another “asset class” and perhaps the most volatile ever. Bitcoin’s market cap was $200 billion in October 2020 and $1.2 trillion a year later in November 2021. Then it plunged back to $300 billion by November 2022—only to re-ascend to $1.5 trillion currently.

Back in the day, it was said that a key characteristic of good money is stable value over time—a proposition which hardly describes the chart below. At best, therefore, Bitcoin is a wanna be currency that got devoured in the maws of Wall Street’s fiery trading furnaces long before it ever developed a use case to buy a car, vacuum cleaner or bar of soap.

Bitcoin: November 2020 to March 2024

Needless to say, a financial casino that can yo-yo the value of any asset by +500%, -75% and then +400% again—all within less than 4o months—is a dangerous place indeed.

Or as the legendary investor Seth Klarman told it, today’s so-called “markets” can turn even the most respectable of assets into “trading sardines”: