A few years ago, the upwardly mobile U.S. equity markets stunned naysayers who consistently claimed that the valuations didn’t match the fundamentals. So far, the markets favor the equity bulls. But in affirming one massive rally and denouncing cryptocurrencies as a “Bitcoin bubble,” the mainstream media concedes their hypocrisy.
Quite often, when business media outlets like CNBC or Bloomberg discussed the Dow Jones or the S&P 500, they used the phrase, “the most hated bull market.” In other words, the equities run had strong justifications – the public just didn’t want to see it.
That logic was frustrating for people on the opposite side of the trade because it was clear that much of the “paper rally” was supported by exactly that – paper. Those who were skittish about the rally had every reason to be.
Fast forward a few years to the present time. The blockchain and cryptocurrencies are all the rage. The digital markets enjoy massive profitability, typically within a few months. But despite hitting all-time highs after all-time highs, and responding robustly to sharp corrections, cryptocurrencies get no respect.
The ongoing Bitcoin bubble stories are a perfect example. Indeed, the blockchain complex is quite literally the most hated bull market. Few mainstream publications are willing to say anything positive about the digital markets, let alone make bullish calls or recommendations.
But the critical difference between the blockchain and the Dow is that the fundamentals for cryptocurrencies are very much valid. Consider the following points, which are a mere handful from the bucket of bullish arguments:
Trading volume for the stock market has been steadily declining for years, setting up a technical contradiction of higher price points and lower volume.
The Bitcoin bubble is the only one of its kind where the vast majority of mainstream voices are calling for its destruction, well before that ground-zero event.
Bitcoin transitioned from +90% market share of total crypto value to currently 56%, proving that other blockchain assets can hold up their fair share.
Major corporations, such as Microsoft and IBM, have integrated the blockchain into their business divisions; in the case of Ripple, major banks are onboard.
The list goes on. I am merely naming some important points off the top of my head. But the main theme connecting the justifications for cryptocurrencies is utility.
One of the most memorable, modern-day speculative implosions is the failed run-up in internet stocks during the early 2000s. At that time, multiple publicly-traded companies ran literally on fake financials. No one was the wiser because valuations kept rising, and people were all too happy to rake in paper profits.
When the truth was finally exposed, the public discovered to their horror that nothing was backing most speculative internet stocks. As I said, there was no utility.
The Bitcoin bubble story only makes sense to people because of its rapid price explosion. They refuse to look at the very real utility of the blockchain. However, an unsustainable fervor from their perspective is actually the beginning of a legitimate paradigm shift.