Here are the takeaways from today's Morning Brief. sign up Every morning you will receive the following message in your inbox:
“The numbers will go up.”
This is one of many memes that arose during previous crypto rallies, with a similar vibe to “To the Moon” and “Hoddle,” the idea that believers will continue to buy in the belief that prices will continue to rise. represents. (This is also the title of Sieg Forr's seminal book on cryptography.)
Cryptocurrency bulls point to last month's introduction of spot Bitcoin ETFs (a “buy the rumor, buy the event” situation) as fundamental factors in the current bull market. The upcoming Bitcoin halving. and speculation surrounding the approval of a Spot Ethereum ETF. There's always something.
All of this could be leading to higher prices. But it seems certain that at least part of the recent craze is due to structures like ouroboros. In other words, people are buying because they expect prices to continue to rise. Prices continue to rise because people buy.
The idea seems to be spreading beyond the world of cryptocurrencies. If you take a look at Yahoo Finance's trend ticker page every day, you'll see many stocks skyrocketing. Some of that has to do with, but is not limited to, the current enthusiasm for AI (NVDA, SOUN, BBAI), which feels different from 2020 to his 2021 meme-driven cycle. Masu. (For example, on Tuesday, Viking Therapeutics more than doubled to top the trending page on news of promising research into a weight loss drug.)
Perhaps it's the “casino-like behavior” that Warren Buffett called out in his recent letter to shareholders. Everyone is trying to pull the right lever and get rich quick. Of course, you can also call it the FOMO trade.
That's what Bill Capuzzi calls it. The CEO of Apex Fintech Solutions believes Gen Z and Millennials are particularly vulnerable. Trading data from his platform showed a 175% spike in trading activity around these two generations' meta earnings, “reflecting the FOMO of younger generations.”
That said, he acknowledges that 20-somethings and 30-somethings want to be actively involved in their finances (and that's his customer base, after all).
“Buying mutual funds and saving them for decades is not what the next generation wants,” he said in a memo to Yahoo Finance.
Cryptocurrencies, Nvidia, and even the S&P 500 have all taught investors that the numbers do go up. (In the case of cryptocurrencies, it is true that they had a tough winter, but they have clearly recovered).
This is where the cautious cliché comes into play. Nothing goes up forever/in a straight line. Trees don't grow towards the sky. And amidst the frenzy, investors should not forget important questions. “What brings the numbers down?”
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