Tracking the daily moves of the cryptocurrency craze can be exhausting. For now, Friday looks like the reckoning, with bitcoin prices plummeting. But just a day earlier, investors were sending the stock of a company up as much as 289 percent after it changed its name from Long Island Iced Tea Corp. to Long Blockchain. The day before that,the news was dominated by insinuations of insider trading on a prominent exchange. And who can even remember Tuesday at this point?
“It’s one of the most inefficient markets I’ve ever seen,” said Arjun Balaji an engineer who trades cryptocurrencies and surveyed the dot-com bubble from his vantage point in kindergarten. Balaji has been buying bitcoins since 2012, and has recently made hundreds of thousands of dollars by day trading other digital coins, too. The market for cryptocurrencies is almost universally referred to as a bubble at this point, but it’s probably more accurate to describe it as a series of bubbles that are closely—but not entirely—related. In recent months, jumping between these bubbles has proven particularly profitable, leading to a cottage industry of self-proclaimed experts. “The money is moving from people who don’t understand the market,” said Balaji, “to people who do.”