Fuelled by hype and hysteria, the market in bitcoin
and other cryptocurrencies went from an obscure niche to a $3tn industry. Then
the house of cards collapsed
https://www.theguardian.com/technology/2022/jul/12/they-couldnt-even-scream-any-more-they-were-just-sobbing-the-amateur-investors-ruined-by-the-crypto-crash
https://www.theguardian.com/technology/2022/jul/12/they-couldnt-even-scream-any-more-they-were-just-sobbing-the-amateur-investors-ruined-by-the-crypto-crash
Bitcoin Plummets Below $20,000 for First Time Since
Late 2020
https://www.nytimes.com/2022/06/18/technology/bitcoin-20000.html
https://www.nytimes.com/2022/06/18/technology/bitcoin-20000.html
The crypto crash proves it – Bitcoin's libertarian
dream is over
https://www.telegraph.co.uk/business/2022/06/15/crypto-crash-proves-bitcoins-libertarian-dream/
https://www.telegraph.co.uk/business/2022/06/15/crypto-crash-proves-bitcoins-libertarian-dream/
Crypto Is Crashing. It Deserves to.
https://nymag.com/intelligencer/2022/06/crypto-is-crashing-it-deserves-to.html
When Crypto’s Own Hedge Fund Geniuses Failed
https://www.bloomberg.com/opinion/articles/2022-06-15/when-crypto-s-own-hedge-fund-geniuses-failed
Cryptocurrencies were supposed to teach traditional financiers a thing or two about how to avoid collapses and crises. Yet it feels like we’re simply repeating history. Specifically, the messy hedge-fund humiliation captured in “When Genius Failed.”
https://nymag.com/intelligencer/2022/06/crypto-is-crashing-it-deserves-to.html
When Crypto’s Own Hedge Fund Geniuses Failed
https://www.bloomberg.com/opinion/articles/2022-06-15/when-crypto-s-own-hedge-fund-geniuses-failed
Cryptocurrencies were supposed to teach traditional financiers a thing or two about how to avoid collapses and crises. Yet it feels like we’re simply repeating history. Specifically, the messy hedge-fund humiliation captured in “When Genius Failed.”
https://www.theatlantic.com/ideas/archive/2022/06/asset-economy-high-interest-rates-inflation/661323/
The Fed Pricked the Everything Bubble
https://www.wsj.com/articles/the-fed-pricked-the-everything-bubble-11655215752
The Everything Bubble Bursts
https://www.nytimes.com/2022/06/17/opinion/ezra-klein-podcast-rana-foroohar.html
Masters of the Bubbleverse Secretive hedge fund
Tiger Global changed the rules on tech investing. Then it all went bad.
The Clues You Missed: 5 Super-Obvious Signs We Were in a Financial Bubble
https://nymag.com/intelligencer/2022/06/5-incredibly-obvious-market-top-signals-everyone-missed.html
My take from February 16, 2021:
https://thehill.com/opinion/finance/538921-have-misguided-policies-led-to-recent-asset-bubbles-and-boom-bust-cycles/
In recent decades, a series of policy missteps have laid the groundwork for the recurrence of financial bubbles and boom-bust cycles. The modern American economy is characterized by cycles that involve rapid inflation of asset prices (that often result in a surge in private sector borrowing and a temporary spike in aggregate demand), followed by an inevitable collapse of asset values, which in turn is followed by ultra-loose monetary policy for an extended period that lays the groundwork for a follow-on asset bubble and a new boom-bust cycle.
Some recent policy actions undertaken to alleviate the effects of the pandemic shock, though well-intentioned, are misdirected and may lay the foundation for a new boom-bust cycle. A few micro-bubbles have already emerged, and there is broader concern about elevated asset values and the growing temptation to “reach for yield.”
My take from May 24, 2021:
https://thehill.com/opinion/finance/554998-is-bitcoin-the-future-of-money/
If not the future of money, can we make a case for Bitcoin as digital gold? Proponents argue that since Bitcoin, by design, is limited to a maximum of 21 million units, it can act as a stable store of value. Given its short history and its intangible nature, it is unclear that Bitcoin offers a true alternative to traditional gold. Gold has a long history as a medium of exchange, and the yellow metal has impressive physical properties that have caused humans to value it highly for thousands of years. Even today, many societies widely use gold for jewelry and ceremonial purposes. Additionally, from a financial standpoint, Bitcoin is currently too correlated with risky assets to act as an effective inflation hedge.
At present, Bitcoin and other cryptocurrencies appear to primarily function as speculative assets whose fluctuating valuations may be driven by financial mania or a form of contagious narrative. Central bank liquidity injections, massive fiscal transfers, rise of a new generation of retail investors utilizing online platforms (like Reddit) to coordinate their actions and the emergence of zero-commission online trading platforms (like Robinhood) have created a speculative frenzy.
My take from September 5, 2021:
https://thehill.com/opinion/finance/570895-the-debate-we-should-be-having-about-the-federal-reserve/
A third area of concern relates to financial distortions associated with the injection of excess liquidity via prolonged periods of quantitative easing by the Fed and other major central banks. Measures originally intended for financial emergencies are now being deployed by monetary authorities to achieve traditional macroeconomic goals. This in turn has caused financial markets to become addicted to a never-ending stream of easy money to sustain ever higher asset prices. Unsurprisingly, it has also encouraged speculative excesses. Unconventional Fed policies might unintentionally be contributing to a rise in inequality.
https://thehill.com/opinion/finance/538921-have-misguided-policies-led-to-recent-asset-bubbles-and-boom-bust-cycles/
In recent decades, a series of policy missteps have laid the groundwork for the recurrence of financial bubbles and boom-bust cycles. The modern American economy is characterized by cycles that involve rapid inflation of asset prices (that often result in a surge in private sector borrowing and a temporary spike in aggregate demand), followed by an inevitable collapse of asset values, which in turn is followed by ultra-loose monetary policy for an extended period that lays the groundwork for a follow-on asset bubble and a new boom-bust cycle.
Some recent policy actions undertaken to alleviate the effects of the pandemic shock, though well-intentioned, are misdirected and may lay the foundation for a new boom-bust cycle. A few micro-bubbles have already emerged, and there is broader concern about elevated asset values and the growing temptation to “reach for yield.”
https://thehill.com/opinion/finance/554998-is-bitcoin-the-future-of-money/
If not the future of money, can we make a case for Bitcoin as digital gold? Proponents argue that since Bitcoin, by design, is limited to a maximum of 21 million units, it can act as a stable store of value. Given its short history and its intangible nature, it is unclear that Bitcoin offers a true alternative to traditional gold. Gold has a long history as a medium of exchange, and the yellow metal has impressive physical properties that have caused humans to value it highly for thousands of years. Even today, many societies widely use gold for jewelry and ceremonial purposes. Additionally, from a financial standpoint, Bitcoin is currently too correlated with risky assets to act as an effective inflation hedge.
At present, Bitcoin and other cryptocurrencies appear to primarily function as speculative assets whose fluctuating valuations may be driven by financial mania or a form of contagious narrative. Central bank liquidity injections, massive fiscal transfers, rise of a new generation of retail investors utilizing online platforms (like Reddit) to coordinate their actions and the emergence of zero-commission online trading platforms (like Robinhood) have created a speculative frenzy.
https://thehill.com/opinion/finance/570895-the-debate-we-should-be-having-about-the-federal-reserve/
A third area of concern relates to financial distortions associated with the injection of excess liquidity via prolonged periods of quantitative easing by the Fed and other major central banks. Measures originally intended for financial emergencies are now being deployed by monetary authorities to achieve traditional macroeconomic goals. This in turn has caused financial markets to become addicted to a never-ending stream of easy money to sustain ever higher asset prices. Unsurprisingly, it has also encouraged speculative excesses. Unconventional Fed policies might unintentionally be contributing to a rise in inequality.