Business/Finance

The terminal value of bitcoin is zero

This is either going to backfire on me – like the famous Whitney Tilson Google statement, “Google with the same market cap of McDonald’s (a stock I own)?! HA! I believe that it is virtually certain that Google’s stock will be highly disappointing to investors foolish enough to participate in its overhyped offering — you can hold me to that.” – or it will go in my frivolous thought bank of things I stated, where I can say, “I told you so”.

Here’s my statement, “Bitcoin, Ethereum, Ripple and the whole lot of cryptocurrencies is an overhyped bubble”.

I’m not saying I’m a sage who can predict the future. I’m also not the only pundit out there saying this exact same statement – the best investors I know agree with this statement. What I’m saying is, “THIS WHOLE BITCOIN CRYPTO GARBAGE IS A BUNCHA HORSE SHIT”.

The hype around these crypto’s is fucking insane. It makes me want to rip my hair out. Everyone and their mothers is on the crypto train.

Any family gathering I go to I get asked about cryptos. Anytime I’m on social media I see friends from high school posting about cryptos like they are a professional investor (these kids don’t know the first thing about “real investing”). Everyone wants on this overcrowded train.

The retail investor is getting sucked into this euphoric bubble – drawn by get rich quick schemes and instant success. It’s not going to end well. Your fucked…

I don’t even understand the valuation thesis. Maybe I’m too old and stubborn to get it. Maybe I just haven’t tried. Or maybe these fucking kids are out of their mind.

Cryptocurrencies don’t produce cash flows. When you buy a crypto-coin you don’t own an economic interest in a business. You don’t own a hard asset you can touch – like land, buildings, or equipment. You don’t even own a propriety technology – from my understanding anyone can write the code to create this garbage.

What’s the hype? Is it because James Altucher’s alluring face has captured the hearts of millions, tricking them into inflating this bubble even more? Or is it because everyone and their mother is buying this hype – sheeple, sheeple, sheeple. I’m not sure the allure to the fad. I am sure it won’t end well. Especially for these shitty companies changing their business to “crypto” miners.

Kodak comes to mind in this instance. Kodak, a dying company, added over $65 million to their valuation after an announcement of their “KODAKCoin”. KODAKCoin creates no money. It’s still in developing stages. The announcement more than doubled the value of Kodak money losing Kodak.

Jumping on the crypto bandwagon by an irrelevant, dead company is a sign desperation by inept management. Not to mention it makes crypto mania look even more like a mania when every loser company starts piling in.

This is very similar to the “.com bubble” where every company with “.com” after its name was valued higher than a real company creating real cash flows. That didn’t end well. Neither will this.

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