> The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities — that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future — will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.
But at least the solid tech companies had revenue in 2001. There's a long history of useless assets becoming a part of a bubble that pops. And this even worse than Beanie Babies. At least with those, if someone still enjoys them in 2021, they can put them on a shelf. Are you going to frame printed QR code of a NFT and tell your friends to scan it with their phones to verify what virtual asset you own?
Cryptocurrency has been through -80% draw downs multiple times in it's history. The question is, is the entire history a story of a pump and dump or are you saying we are currently in a smaller bubble & bitcoin should be ~5k instead of ~40k?
Why has it been able to withstand a draw down of 50% 4 times in 13 years?
I was referring more to NFTs than cryptocurrencies. They went from nothing to huge too quickly. NTFs are closer to Beanie Babies, Bitcoin to baseball cards. The big gotcha with NTFs, and why they're worse than Beanies, is they're incredibly hard to price because they're non-fungible, and unlike art (also non-fungible), it's not clear which tokens are desirable or why.
Somehow I don't think you'll read those and decide it's not a pump and dump anymore, are you saying that it's not actually a condition for beliving it's something other than a pump and dump, but rather a mechanism that might reduce the desire to participate in a pump & dump?
