Bitcoin Bites Bigtime
negative connotations, but when applied to what are already highly speculative assets, the results can be both spectacular and disastrous, as the founding partners of Three Arrow Capital (pvt) discovered when they found themselves unable to meet margin calls last week, due to the rapidly falling values associated with the funds cryptocurrency investments, while Crypto lending firm Celsius (pvt) is asking customers to give it more time to stabilize liquidity, after halting withdrawals last week. Taking the opposite tact, the President of El Salvador a country that adopted bitcoin as legal tender last year, despite a warning from the IMF, told investors to ‘stop looking at the graph and enjoy life”, although not mentioning how they were to do so given the rapid decline in the value of their crypto-assets.
There is little to say about the speculative aspects of cryptocurrency other than it was and remains a classic example of the greater fool theory, but we wonder where the next shoe will drop. Actually we don’t wonder about that, as we believe the NFT market will eventually find itself wondering what is the real value of digital real estate? Is it $1t as an 11/2021 study indicated, or is it a ‘collective obsession’ that plays out relatively quickly as its financial underpinnings face an undetermined future? We would be careful chasing pictures of grinning monkeys or smiling stick figures because they are smiling as their authors quickly convert your crypto into cold hard cash and head for an extended vacation in Ibiza. P.T Barnum said it well in “There’s a sucker born every minute”, although it’s been said many times before and since in other words.
There is little to say about the speculative aspects of cryptocurrency other than it was and remains a classic example of the greater fool theory, but we wonder where the next shoe will drop. Actually we don’t wonder about that, as we believe the NFT market will eventually find itself wondering what is the real value of digital real estate? Is it $1t as an 11/2021 study indicated, or is it a ‘collective obsession’ that plays out relatively quickly as its financial underpinnings face an undetermined future? We would be careful chasing pictures of grinning monkeys or smiling stick figures because they are smiling as their authors quickly convert your crypto into cold hard cash and head for an extended vacation in Ibiza. P.T Barnum said it well in “There’s a sucker born every minute”, although it’s been said many times before and since in other words.
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