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Matt Levine

Crypto Debt Can Be Trouble

Also banker chats, pre-MBA hiring and bond market liquidity.

One thing that has happened is that the prices of risky cryptocurrencies have gone down. Bitcoin traded above $40,000 two months ago; today it got close to $20,000. Ethereum went from $3,000ish to $1,100ish. The total market capitalization of all cryptocurrencies, “which topped $3 trillion in November, dropped below $1 trillion.”

In the abstract, this is just fine. Extremely speculative people had extremely speculative positions in extremely speculative assets, and the prices went up a lot, and then they went down a lot. Some gamblers made some money and then they lost some money; that’s how gambling works. People who put their life savings into Bitcoin should be told, very firmly, that they should not have done that; that was wrong, and now they know. Also though they still have like half of their life savings. If you put your life savings in the S&P 500 you haven’t had a great year either.