Bitcoin and the blockchain are no longer obscure, unfamiliar concepts. On the contrary, no one can stop talking about them. For many investors — especially those that got in recently — this is a favorable development since it implies additional volume and participation. But on the other side of the coin, the rise of bitcoin mania has got to be disconcerting for long-time investors.
Last week, popular fast-food company Jack in the Box launched a commercial mocking bitcoin mania. “Jack,” the company’s quirky spokesperson and official face of the brand, mentioned that holiday shopping and bitcoin about to go bust leaves most of us broke. The solution? Buy junk food that’s priced just right, of course!
And three weeks ago, “Late Night with Seth Meyers” introduced a skit of three housewives discussing investment options. One wife complains that investing is complicated, but another chimes in that the perfect solution is bitcoin. As she explains the complexity of the blockchain, the complaining wife suddenly becomes interested, while the third wife acts as the voice of reason.
The underlying message is that bitcoin mania has gotten so out of hand that otherwise rational people are making completely irrational choices.
Proponents of cryptocurrencies will dismiss this coverage as nothing more than the desperate death throes of the traditional markets. There’s definitely truth in that assessment. However, one of the telltale signs of a market bubble is that everyone is talking about the asset(s) in question. With cryptocurrencies no longer a niche community, has bitcoin mania hit its peak?
While the recent media coverage about cryptocurrencies seemingly points towards the bubble bursting, we should first be aware that this media attention is nothing new. During the late spring season of 2016, “The Late Show with Stephen Colbert” had a monologue which discussed bitcoin among other subjects. Almost four years ago, “Conan” featured a segment dedicated exclusively to bitcoin.
Though they mocked bitcoin at the time, cryptocurrencies eventually soared.
Another point to consider is that we shouldn’t worry about simple media coverage. When we should think about selling out is when bitcoin mania grips the general public. If former blockchain critics are now pumping cryptocurrencies, that’s not a good sign for sustainability.
Fortunately, the animus towards cryptocurrencies is extremely severe. I’ve yet to come across a popular figure publicly give bitcoin a fair shake. That tells me that “bitcoin mania” still has plenty of life left.