People have such a hatred for crypto they are overjoyed to celebrate a crypto crash. They were annoyed people they disliked were getting rich and now feel “vindicated” the bubble is popping.
But…have people actually looked around? Airbnb stock is down 80% in the last 6 months. Netflix, Twilio, DoorDash, and many many other companies have taken a similar beating.
Bitcoin has actually done much better then most of the tech stocks, especially if you look at a 2 year chart.
Amazing to see all this gravedancing when the crypto crash isn’t a crypto crash at all but a speculative asset crash and most of our jobs fall into that category.
Another funny dynamic is many pro-crypto subreddits hate NFTs but similarly we’re seeing gravedancing over monkey JPEGs even though the bored apes have held up better then many “serious” crypto projects.
My point is that people want confirmation bias for their narrative. And they are overjoyed to celebrate crypto crashing to extent it confirms their narrative it’s a big Ponzi scam that was due for a crash. But they seem less eager to be intellectually honest and work in the rest of what’s going on into that narrative.
If bitcoin falling 60% proves it was a scam what does Airbnb falling 80% say about Airbnb. And I know your answer will be they have a business model with cash flow. But these are all “a priori” assumptions. The crash is viewed in a different lens based not on evidence but on what we believe to be true beforehand.
Tech bros celebrating the death of crypto bros are knee deep in the icey waters of the Titanic sinking celebrating the guy whose shoulder deep as they both continue to sink, but due to preconceived notions refuse to realize they’re all about to drown from the same iceberg crash.
Only if you look at the 2-year chart (or longer). That includes the tail end of the Tether-fueled market manipulation drive, and at longer scales the entire speculative boom.
Anyway, why are you so concerned about people being "anti-crypto"? You seem to think that everyone makes value judgements based only on how well something performs financially.
That might be relevant if you are an investor. But I am sure there will be more services like AirBnB if it fails, as the concept is sound. Cryptocurrencies on the other hand have certainly enjoyed their time in limelight for a while already, but have failed to deliver any meaningful mass market products (if you discount investing - which is indeed exactly akin to buying AirBnB stock without ever going on a holiday.)
I think it's reasonably skeptical. There is a balance here.
> People have such a hatred for crypto they are overjoyed to celebrate a crypto crash. They were annoyed people they disliked were getting rich and now feel “vindicated” the bubble is popping.
I like crypto and even I am rooting for the crash. There is simply too much hype and investment in useless projects, it distracts from the actually useful crypto projects, and is generally bad for the development of cryptocurrency as a whole
But I think we will see increased adoption of less decentralized and anonymous systems like GNU Taler or Nano for micropayments, which are generally lower-risk and hinge more on per-transaction fees. I think that is the "real" use-case of cryptocurrency besides buying drugs on the DN- to serve as an micropayment/spam-prevention system and an alternative to advertisement-based funding for websites.
Output obfuscation is a really useful feature, but it comes at a pretty great cost of bandwidth. I think this area will continue to improve in the future.
That said, if you did want to use tech stocks as a comparison, Bitcoin is the flagship asset of crypto, and meant to be the most stable (deflationary etc.) so more akin to Apple. Apple is essentially flat over the past year.
It’s not, but “reality catching up on speculative, excessive growth” isn’t purely a cryptocurrency thing; they’re just so much a symptom of everyone wanting in on that tech stonks that only VCs could afford.
It’s funny how “the Uber of X” was an admirable description, considering that whole economic model is being questioned right now. Perhaps it just wasn’t the case that Uber was the Uber of Uber.
The second is the collapse of a bunch of crypto schemes (yield farming, leveraged funds, black box firms etc.). These two things are fundamentally different.
Focusing on the first one only since that's what crypto adherents seem to defend with the "it's just like tech stocks" claim (putting aside that crypto was supposed to be different than stocks, and deflationary), what I haven't seen them explain is how "excessive growth" would even be defined in a crypto asset. In stocks, I can point to a price-to-earnings ratio or a price-to-sales ratio to describe how a business is trading far beyond a value that even has hopes of being realized. In Bitcoin, or even worse some shitcoin used for nothing at all, what can I use to distinguish between "excessive" growth and appropriate growth?
There is a critique that can be made of the stock market that it is essentially a speculative game largely divorced from the underlying business fundamentals, and that crypto assets are just a pure form of speculative capital chasing returns. I don't think that's really true though, because stocks do seem to show significant correlation to the underlying business performance. That's why Apple is flat YoY while Airbnb is down 60%.
> In Bitcoin, [...] what can I use to distinguish between "excessive" growth and appropriate growth?
I suppose it depends on what you think Bitcoin is.
It sounds like you think it's a stock.
The SEC thinks it's a commodity.
Clearly it was intended to be a currency, although a very gold-like one.
https://journal.bitcoinreserve.com/can-we-calculate-bitcoins...
[...] researchers determine bitcoin's value based on its use in the following "addressable" markets—areas in which the asset can find the most use:
The unbanked, Tax evasion, Remittance, Online transactions, Store of value, Micropayments, Reserve currency, Offshore accounts, Medium of exchange
Reserve currency counts among bitcoin's many capturable "markets." Arguably this market is one in which bitcoin could wholly dominate—by becoming a global reserve currency.
(...the article goes into more depth.)
> There is a critique that can be made of the stock market that it is essentially a speculative game
Stocks have clear utility:
You don't have to own literal grain to be invested in our food supplies.
And you can hedge some of the risk of literally owning grain to people with money.
Whatever the underlying value of an asset is, the asset itself provides ability for hedging, which itself is valuable.
This doesn't accurately reflect the source of my opprobrium, or many other commenters here. I don't particularly care about whether cryptocurrencies make people stinking rich. I care that they're terrible for the planet, morally and civically corrosive, and have hurt people that I care about (in the forms of scams, lies, and false advertising around returns).
As far as I concerned, many (but not all) of these critiques apply to the last 15 years of startups as well. The proximate causes might be slightly different (adtech and cheap VC money), but the outcomes are very similar. So you won't find me dancing on one grave and sobbing over the other. I'll be practicing my Hopak[1] instead.
Of course I am aware of my strong bias, I don't think I will ever be neutral on this subject, but it does not matter as this bias is only affecting my personal decisions.
Is it even possible to build a neutral judgment on this thing?
Celebrating that bad things burn when good things burn for the same reason (economic downturn) seems like it’s either uninformed or a coping strategy.
I have however reliably found that the HN crowd has rarely been emotional in arguments regarding crypto. For some reason, the anti-crypto arguments being thrown around here have been very convincing, and the pro-crypto arguments less so. But no one here has “silenced” anyone, it’s a public forum.
However, if I were in crypto, I would be extremely worried that one of the biggest tech communities, with “hacker” in the name isn’t really on board with crypto.
Different because shares still give you a part of a real business and equal because it showed that money was too cheap.
I'm not anti crypto just because, I have plenty of good reasons.
And no real cryptobro was able to convince me with good argument s otherwise.
Of course the share prices General looked weird that's why I didn't invest last time I wanted to.
The fed rate is still under 2%, it was 2.41% in March of 2019, there's still room to continue to take the punchbowl away.
Gas prices are still high and inflation is still pretty much on a tear. It took a bit of a pause but $110/bbl oil is still quite high.
This is not even a recession yet.
At the same time though the fed tacking on 50 and 75 bp rate hikes and talking about how they want to puncture the housing market sounds like we're definitely going to have one. And I don't think that is just all talk since we've seen actual increases in real labor costs, unionization and a large overhang of jobs, along with worker sentiment towards job hopping and zero job loyalty.
So I very much think we're only at the start here. The Fed is going to continue to jack up rates until something(s) in the real economy significantly pops. And Zuckerberg and Musk have been talking tough-economy talk and they're likely bellweathers for what the CEO/billionaire class is thinking.
I don't think we've seen the crypto crash yet.
When (not if) Coinbase pops then I think we'll be in the middle of it.
I had to work extra hard to try and convince family members to not sink their hard earned savings into it, and worried that the hype train would affect many I knew when it actually did crash, during one of the worst economic periods in recent history...
It did crash hard, despite how many promises were made. NFTs also were proven to be insecure. Web 3.0 was based on totally fraudulent claims by opportunistic people... That is why people are celebrating the current peril it is in, and also why no one accountable ever really wants to step up and own the failure of it all.
Still down a lot, but not quite 80%.
That's a horrible timeframe to look at because you're really just looking at the covid economy. The 20% drop in the S&P 500 is the meaningful number for the broader economy.
No, I was annoyed that people were being scammed. The bulk of this crypto advertising was aimed at selling extremely dubious products to normal people who had no idea what they were getting themselves into. If another crypto ad is never placed, the world will be a better place.
Not all these projects will survive, 90% of crypto projects will die, just like the 90% of these startups failing and the fact that we are seeing the many projects and startups getting wiped out in this crash, like the dotcom crash we will see the projects that have utility continue to survive this crash.
Like in the replies to your comment, many of the angry anti-crypto folk continue to fall into the absolutism trap and the only absolute that exists: is none. Just look at the free software-foundation, after 37 years of fighting the likes of Google, Microsoft, Facebook, etc of trying to get rid of all non-free software, it has completely failed and the tech bros have hijacked the point of open-source. It has gotten so bad in that realisation that there are now tech bros that are branded as 'traitors' in this noble conquest of ridding all non-free software.
Now the tech-bros are screaming at destroying all crypto-projects towards the crypto-bros. Destroying 'all of them' doesn't seem to be going well for them and they are no better than the crypto maximalists in aiming for this goal.
Bitcoin itself isn't a scam, in fact it has (or had) really ambitious goals. But the dynamics in the last years are quite scammy because not many things are bought with BTC. Maybe PoS will bring something new
I think celebrating this “crash” is primarily driven by the cryptocurrency community being so insufferably obnoxious to promote their self-serving agenda (“Have fun staying poor”). There’s a natural desire to celebrate the downfall of a community that has been exhibiting such a condescending superiority complex during this run.
I suspect that suicide rates, other wider societal effects, etc are higher with cryptocurrency because (in addition to other factors) it becomes the entire identity to most people in the space - hence the obnoxious Thanksgiving crypto bro archetype.
For these people the crypto crash is more deeply felt because I’m sure for many of them it’s about much more than the financials. They take it really personally to the point where it can strike to the core of who they are. This is especially dangerous given other than constantly hawking their favorite coin they are handing a significant portion of their well-being to a market they have absolutely no control over. Scary.
They also tend to be risk seeking to the point of desperate/reckless, inexperienced, easily influenced, generally unsophisticated, etc. It’s the shoeshine boy giving stock tips. I also think that due to the volatility it likely attracts legitimate gambling addicts at a much higher rate (and the resulting jump in suicides and shattered lives).
I can’t recall it being common to post suicide hotline numbers on various forums, etc when a stock goes down 80%…
If I’m doing any grave dancing at all it’s due to the most obnoxious of them just finally shutting up about crypto. It gets old so quickly.
I have a contact on LinkedIn who is a high level executive at a crypto company you’ve heard of. His activity on LinkedIn is the most childish, obnoxious, and often times offensive I’ve ever seen from a professional in a professional setting. It blows my mind this is how he conducts himself in public on a professional social media platform.
His conduct along with activity, stories, interviews of other major figures (think SBF-types) adds yet another data point on just how far blockchain is from real relevance to the general public.
I keep thinking - if an executive at that level from a bank or any non-crypto related financial anything made these posts they would be fired more or less instantly. This guy was promoted to his current position a few months ago.
He went from at least one absolutely ridiculous FOMO/if you don’t buy in you’re a moron/have fun staying poor post daily to first disappearing for a week (likely managing fallout) to now occasionally posting some lighthearted saying maybe once a week or so.
Humble pie.
Even though I essentially can’t stand this person (and many like them on Twitter) I find their personalities and activity to be a really interesting observation into the space.
It might be as bad, shallow and devoid of value as any other Ponzi scheme of Tulip Mania, and this is sentiment I have about it, but this is not proof.
What if the haters are too biased to see the real value of the so-called "blockchain"?
Only History will tell.
We've had more than ten years of crypto/blockchain history already. We don't need more time to tell -- we have many years of it already being awful. History is already telling us.
If you really wanted to see someone argue that position nobody-but-you brought up, here you go: https://youtu.be/XpH3O6mnZvw
The real destructiveness of crypto is the other ideas that have been starved for oxygen during this bubble. I am glad it looks like we are beginning to move on.
I always think about this when I see people rail against short sellers, as if the whole idea of betting against a company is morally wrong.
Short sellers are one of the only checks against overly inflated equity prices. If the only people allowed to participate in a market are the believers, you are going to get a very distorted view of the actual value of assets.
For the market to do its thing, you need failure.
The real destructiveness of business as usual.
“When a man’s salary…” is how the saying starts.
Don’t underestimate what can come still. Based on the high price to equity ratios in the stock market, it is likely that the "correction" will correct more. This is also in line with the recent rounds of layoffs. Crypto going down first makes sense due to the amount of speculation. I‘m really curious whether we‘ll get a Lehman Brothers moment in 2022.
It’s odd to look prices dropping to 1/3 and think thing things could get a lot worse or it could turn into just another blip on a larger upwards trajectory.
I suspect that most retail Bitcoin holders bought it last year and are down 30-70%. The people who post on HN are very much outliers, having known about Bitcoin for a decade. The real retail volume in 2021 came from relatively uninformed people buying their first crypto.
Also, there are the publicly listed corporate whales. Tesla has 42,000 Bitcoins bought at an average price of $31,620. MicroStrategy has over 130,000 Bitcoins bought at an average price around $30k as well.
Public company accounting standards require these companies to mark down their crypto holdings regularly, so it seems that Tesla will be booking a roughly $420M loss for the past quarter, and MSTR has lost a whopping $1.3 billion. (I'm sure Musk appreciates that the loss is close to 420 though, even if Tesla shareholders don't.)
That said, clearly a lot of people are underwater.
Which is just one of the reasons why it's a bad store of value or medium of exchange.
I mean, ~everyone who believed the crypto ads that the article is about did, for a start.
I would assume it's far from done unravelling yet, though. Another dubious crypto HYIP seems to go under every few days at the moment.
Please don't create accounts to break HN's rules with.
Seriously, during other crashes, I remember thinking of the real negative externalities that happened during the crash, e.g. many economists have drawn lines to the current housing supply crunch due to underinvestment after the Great Recession.
I don't feel any of that now. I primarily feel that a bunch of grifter scams are finally getting washed away, and then what you're left with are products that are searching for use cases where they aren't worse in every way than currently available products.