The Crypto Cycle

There are multiple things that we see as value: Value in use, in exchange, intrinsic value, etc. All that resolves to one point price at any one time. What the idea of value of crypto broadly is that it would allow for exchange outside of the state's eyes, but with a record of all the transactions in a (semi)anonymous way. However, the day to day processing of transactions didn't happen. Partially there were network effects in that you can't buy things in BTC if no one is selling things in BTC, but also the transactions are computationally heavy.?

So instead of a medium of exchange, the backers started selling the idea of BTC and its ilk as some sort of asset, the idea being that if you just held onto it, you could get rich. And people did. Right now there are 23K millionaire wallets. But that idea of value is more in the idea that there will be someone down the road willing to buy the coins when you want to liquidate and buy something in dollar-denominated terms. That value proposition is looking less and less likely over the past year, as we've seen people chase after different use cases like NFTs and their derivatives.?

I have a rule in my head that I call "Mihelic's First Rule of Financial Products" in that once someone is selling a financial product on television, all the smart money is done and they're chasing the dumb money. You have a Super Bowl advertisement with Matt Damon? That's the top. It tracks pretty well from retail brokerages 20 years ago to mortgages in 2007 to physical gold.?

That's not to say that the technology won't be fruitful in the future, but we're over a decade into the development of the technology and we've already seen several hype cycles that have fizzled out. Thus I am skeptical.?