Forget about investing in Apple, Nvidia, or Tesla. Why not buy TrumpCoin? Or maybe Vine Coin? From our president’s own virtual token, to a short-form video app turned bust, there’s cryptocurrency for practically everything.
Attempting to weed out the useful from a sea of uselessness is laughable, since utility is nonexistent within each one of them. Uneducated buyers are coaxed into believing they are “investing” in an idea, when instead they are speculating on a medium of exchange.
Communities are often formed around these tokens through social platforms like X and Reddit. These communities act as a vehicle for relevancy, since it’s the only variable that sustains their million, sometimes billion-dollar market caps. This is vastly different from the stock market where valuations are based on the present value of future cash flows, a concept crypto enthusiasts find too hard to grasp (granted, this doesn’t stop them from speculating in the stock market, too).
You’ll also find that most crypto supporters don’t understand blockchain technology either. They instead focus on technical analysis—the art of drawing random lines on charts and attempting to predict price action. The harsh reality is when hype eventually dies down and buyers are left holding their worthless digital assets. This is shockingly like the dot-com era, where only a handful of websites stood the test of time and are still around today.
Perhaps that comparison is a little too extreme though, and it’s better to assume that absolutely none of these coins will survive. What about Bitcoin? Often referred to as “digital gold,” due to its deflationary nature and clunky transaction speeds, speculators expect Bitcoin to appreciate regardless of cultural shifts or what’s trending on X. But, what’s the problem with that? What goes up must come down, and at some point, the music will stop for Bitcoin.
With our own president leveraging his social status to launch another pointless token, I see this as a clear inflection point demonstrating just how delusional cryptocurrency backers have become. Not only will small tokens drastically fall in value, but so will Bitcoin once buyers reevaluate its underlying fundamentals (hint: there aren’t any). I suspect this cryptocurrency euphoria will start unwinding during this year, into early next year, following an extended period of little to no innovation within the space.
It’s no surprise crypto is in such chaotic dysfunction, given the average consumers are between the ages of 18 and 40. Maybe they should focus on paying next month’s rent instead of yolo’ing into Vine Coin.
