Cryptocurrencies are really interesting. I find the cryptocurrency space to be absolutely fascinating from a sentiment and behavioral economics standpoint. They have captured the attention of a much wider following in the last month as the gold standard crypto, Bitcoin, has doubled in value (this morning reaching $45 billion of total market capitalization).
I have written about the crypto space twice during May and the questions and commentary on the space reached a fever pitch yesterday as Bitcoin, Ethereum, et al continued to soar in a parabolic fashion. We have also seen a lot of bearish top calling and bubble proclamations in the last week, which is also characteristic of a parabolic rally or perhaps the final phase of a bull market just before a blow-off top. The problem is the top callers can be off by a mere two weeks, but still either miss out on 100% or even 500% gains OR get stopped out on shorts (for shortable markets) in the process.
Yesterday I conducted a Twitter poll:
And frankly I'm not sure what to make of the results. Are crypto bulls crazy because nearly 1/2 of respondents still think cryptos will outpace gold after the enormous year-to-date gains? OR Is the fact that more than 1/2 of respondents believe gold will beat Bitcoin/Ethereum for the rest of the year a sign that sentiment is still too bullish on gold?
I don't have the answers. When things get crazy it's best to be humble and not try to outsmart the madness of crowds. For now I'm sticking with my assertion that total cyrptocurrency market capitalization will need to reach north of $100 billion before we get the next big shakeout in the crytpo space. We're at ~$90 billion at the time of this writing.
One thing you can be sure of though is that markets don't go up forever, it's NOT different this time. However, anyone who thinks they know what will happen next is fooling themselves.
Disclosure: Author is long Ethereum/USD at time of writing and sold some for the first time yesterday.
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