What is needed to increase bitcoin by almost 20%? How about Tesla (TSLA) – Get report Chief Executive Elon Musk simply tweeting “#Bitcoin.”
That was what he did on Friday morning, and bitcoin is now trading at $ 37,537.79, an increase of 19%.
So, what is the conclusion of this? Retail investors are in a fast-paced manic mood.
It’s one thing to push established companies like Amazon (AMZN) – Get report, Apple (AAPL) – Get report and Nike (NKE) – Get report, for extended assessments.
But it’s another thing to go crazy with GameStop (GME) – Get report, AMC Entertainment (AMC) – Get report, special purpose and bitcoin acquisition companies. It’s all speculation at this point.
20 legendaryº Century economist John Maynard Keynes said that investing in the stock market is like judging how others will judge a beauty contest.
In the case of bitcoin, stocks with weak fundamentals and SPACs, every judge is evaluating the asset with a perfect 10.
Nothing here is new. Given human nature, bubbles almost certainly exist since the beginning of time. Adam and Eve may well have started a race for the forbidden fruit. The 17º century saw the bubble of dutch tulips and the 18thº century saw the bubble of the southern sea.
You are undoubtedly familiar with the latest bubbles – dot.com stocks in the late 1990s and the real estate market in the early 2000s.
Bitcoin, so-called junk stocks and SPACs are simply a continuation of that line. Markets change between greed and fear, and now greed is dominant.
Remember that periods of greed, in the financial markets or elsewhere in life, do not usually end well. Most of the time, the greedy don’t go unpunished.