Peak Financial Insanity: Fartcoin Is Now Worth More Than Office Depot
By Michael Snyder/End of the American Dream December 18, 2024
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A cryptocurrency known as "Fartcoin" that was created as a joke is now worth more than 800 million dollars. How in the world is that possible? While the real economy is deeply struggling, a wave of euphoria is sweeping through our financial markets and cryptocurrency prices have been soaring into the stratosphere.
In particular, there are some people that have been making enormous amounts of money by pumping and then dumping "memecoins" that have absolutely no underlying value whatsoever.
Fartcoin is one of the most prominent "memecoins", and it now has a market capitalization that is roughly equal to the market capitalization of Office Depot...
Yes, it's called Fartcoin. Yes, it is totally useless.
And yes, it has nevertheless tripled in value over the past week to a market capitalization of more than $700 million -- about equal to those of Office Depot, Guess jeanswear, and the parent company of Steak N' Shake.
The carnival-casino era of cryptocurrencies has come back with a vengeance, riding a broader wave of investment in bitcoin that was itself spurred by the election of Donald Trump. It's minting millionaires while potentially harming others -- yet everyone, even the losers, seem to be in on the joke.
We have seen some speculative financial bubbles in the past, but nothing like this.
As I write this article, the market capitalization of Fartcoin is 853 million dollars.
Meanwhile, the market capitalization of Office Depot is just 830 million dollars.
Are you kidding me?
Investing in "memecoins" such as Fartcoin is essentially just an extreme form of gambling.
You are hoping that the joke will stay funny long enough for the price to go up even higher so that you can leave someone else "holding the bag"...
Memecoin buyers and sellers alike are, for the most part, aware that their trading activity amounts to the riskiest kind of gambling, Bautista said. It's all about exiting one's position to avoid getting left with "holding the bag" and failing to trade up and strike while the price is hot.
"Because they're worthless, you're betting on the 'greater fool,'" he said, referring to the idea that someone else will pay a higher price for a given memecoin. "You're thinking, 'I'm early to this, someone will buy the bags.' But there's no underlying driver of its value."
Ultimately, the long-term value of Fartcoin is zero.
But for the moment there are some people that are making lots of money on speculative price fluctuations.
There are algorithms that have been designed to identify and respond to price movements, and those algorithms can be extremely profitable.
The key is to get in early during the "pump" phase, and then dump the memecoins before the "dump" phase begins. The following comes from a recent piece that was authored by Bill Harris...
In my opinion, it's a colossal pump-and-dump scheme, the likes of which the world has never seen. In a pump-and-dump game, promoters "pump" up the price of a security creating a speculative frenzy, then "dump" some of their holdings at artificially high prices. And some cryptocurrencies are pure frauds. Ernst & Young estimates that 10 percent of the money raised for initial coin offerings has been stolen.
The losers are ill-informed buyers caught up in the spiral of greed. The result is a massive transfer of wealth from ordinary families to internet promoters.
When everything comes crashing down, you aren't going to want to have your money invested in Fartcoin.
Instead, you are going to want to have your money in tangible assets.
But for now, the cryptocurrency industry is extremely hot, and prominent politicians have been suggesting that the federal government should start investing in it...
In July, then Republican candidate Donald Trump promised to create a "strategic national bitcoin reserve" and predicted bitcoin could eclipse gold's $16 trillion market capitalization during an appearance at the Bitcoin 2024 conference.
Republican senator Cynthia Lummis has introduced a bill to congress, entitled the Boosting Innovation, Technology and Competitiveness Through Optimized Investment Nationwide (BITCOIN) Act, which proposes the U.S. buy 1 million bitcoins over five years to reduce the spiraling $35 trillion U.S. national debt.
It is being suggested that if the federal government starts buying cryptos, a single bitcoin could be worth "$800,000 by the end of next year"...
"If Donald Trump is successful in putting forth a lot of the proposals that he's proposed to the community, the sky is the limit because bitcoin has a fixed supply," Perianne Boring, the founder of crypto trade association The Digital Chamber, told Fox Business this week.
"The stock-to-flow model says it's going to be at over $800,000 by the end of next year," Boring added, which would give bitcoin a market capitalization of around $15 trillion, up from $2 trillion currently.
Are we on the verge of a massive speculative boom, or could we soon be headed for an unprecedented bust?
Cryptocurrency prices have always been highly volatile, and that is especially true for memecoins.
Personally, I have no idea why anyone would ever put their hard-earned money into something called "Fartcoin".
Making a "currency" out of a joke is one of the stupidest financial ideas that I have ever heard.
As Bill Harris has aptly observed, it "makes no sense" that people actually consider such "currencies" to have any value whatsoever...
In what rational universe could someone simply issue electronic scrip -- or just announce that they intend to -- and create, out of the blue, billions of dollars of value? It makes no sense.
All of this would be a comic sideshow if innocent people weren't at risk. But ordinary people are investing some of their life savings in cryptocurrency.
If you buy Fartcoin tomorrow, maybe it will keep going up, and maybe you can sell it before it crashes.
But you definitely don't want to be the one that ends up "holding the bag" when the music stops.
I really think that we have reached peak financial insanity.
We have never witnessed such complete and utter lunacy, and it won't be too long before this joke comes to a very bitter conclusion.
Originally published at End Of The American Dream
