The guy from “the Big Short” (Steve Eisman) doesn’t get why people are into crypto. Which is, a little ironic considering everything.
What I mean is this, cryptos just went into a bubble and bust cycle that [on a price chart relative to the asset class; not in total dollar value] dwarfed anything we saw in the US housing bubble.
Meanwhile, Eisman is famous for shorting the housing bubble thanks to the movie and book “the Big Short” (Steve Carell plays him in the movie).
Meanwhile, futures contracts allowed people to short the Bitcoin bubble, and the short positions taken at the height of the bubble were so epic that many people in the community dubbed the event “the big short” (a direct reference to the movie).
Seriously, this is like Christian Bale not getting why people are into Marvel Comics (Bale plays a character in the Big Short, he was also Batman… in the Batman movie, not IRL).
To clarify, what people see in crypto in terms of price is what they saw in the booming real estate market leading up to 2006, an opportunity to get rich on the way up and an opportunity for a “big short” on the way down.
Meanwhile, what they are into in terms of technology, is the rather exciting underlying tech that can in theory help protect people from the policies of states and banks which can jeopardize the integrity of fiat-backed currencies, 401ks, IRAs, homes, etc (so far not so good, but that is aside from the point)
I get that his comment implied that he didn’t see what people saw in the asset class cryptocurrency, not that he didn’t get what people saw from a technical perspective from analyzing price charts. I also get that this was just a quick snippet from an interview where he focused on banks and technology, and it is likely that he would actually be a fan of some of the underlying tech.
Still, all of that said, I found the whole thing ironic enough to comment on.
To use another metaphor, it is a bit like the guy from Wolf of Wall Street (who in the movie gets his start with penny stocks) not understanding why people shill altcoins (to be fair, Jordan Belfort is no crypto fan either <— understatement).
Like, dudes, the movie version of your faces are on half of crypto trader’s profiles. What is there not to get?
Irrational exuberance over an asset class + Greed + the ability to short + a rapid and quick 24/7 market that is either going to the moon or going to crash down in a way the world has rarely seen (and is likely going to do both more than once along the way).
Meanwhile, people who are into crypto either/and/or 1. remember 2014 and the housing bubble and are betting history will repeat (thus are tactfully taking long and short positions), 2. haven’t made their countless billions yet and are taking a chance on crypto (almost everyone who is buying crypto is this), 3. are in it for the technology and truly believe the volatility is worth gritting their teeth through.
All three of those are reasonable and valid reasons to be in the space. Further, anyone in the space for longer than a month knows full well it is a bit of a roller coaster ride from hell.
It is simple. People are taking a risk for the hope of reward, the technology is cool, humans like the blow speculative bubbles, and newcomers tend to get in deep and get commitment bias before they peer too deeply under the hood. That is what was up last time, that is why those MLMs are still going after all these years, that is why people still buy penny stocks after they pump, that explains most economic bubbles, and that is what is up this time. Mystery solved. Now who is going to play Satoshi in the upcoming movie? That is the real question.