“The four most expensive words in investing are: ‘This time it’s different.’”

John Templeton

I’m writing this essay not so much to convince anyone of my point of view as to outline my current thinking around cryptocurrencies and the mania surrounding them. Because this is a controversial subject over which smart people disagree, I’m making these claims in public so that I might be proven either right or wrong later.

If you disagree with any of my claims here, or have more to add, I’d appreciate you leaving a comment with your thoughts, both for my benefit and for that of other readers.

Claim 1: Crypto is a Bubble (Confidence: High)

The hallmark of a bubble is people buying an asset primarily in the hopes of future appreciation driven by other buyers, rather than because of any notion of its long-term value. Cryptocurrencies have satisfied this criterion starting a number of years ago, and from what I’ve seen continue to do so. The trouble with bubbles is that once the supply of hopeful buyers runs out, prices stop rising and start falling as fear replaces greed. I predict that this will happen to all cryptocurrencies, including Bitcoin and Ethereum, within a decade. This goes doubly for double-bubble assets like NFTs.

Crypto boosters claim that cryptocurrency has long-term value as a digital currency, but I disagree for the reasons outlined in Claim 3.

Claim 2: Blockchain technology has no non-monetary applications (Confidence: High)

While this mania seems to have calmed down as of late, I’ve seen a number of claims that blockchain technology – i.e. the ability for