Most cryptocurrencies are “grotesquely overvalued,” according to pseudonymous Ethereum ETH/USD advocate Polynya.
It’s “the craziest, most utterly-detached-from-reality, unhinged casino market the world has ever seen,” Polynya added.
What Happened: The cryptocurrency space does not often face harsh criticism from one of their own. Long-time researcher and Ethereum advocate Polynya has been one of them, calling out cryptocurrencies for their “negligible product-market fit” in his latest blog post titled “Why most crypto assets are grotesquely overvalued.”
He states the “vast majority” of the industry’s product market-fit is “alternative or speculative store-of-value,” which is why Bitcoin BTC/USD remains the dominant asset.
A long tail of crypto assets enjoy a massive speculative premium due to “doomer theories about imminent global economic collapse.” Most of the top tokens’ billion-dollar valuations are “inflated,” and “should be worth a few million at best.”
In Polynya’s words, there is none: “gamble on random rubbish, rotate back to an asset that you deem to be a store-of-value.”
Why It Matters: The author, a long-standing anonymous researcher in the space, has previously raged against the “hopium & delusion malaise” in the industry, famously calling “Crypto twitter was *the* worst community” he’s ever participated in.
The industry’s most famous advocates now go beyond long-standing believers like ARK Invest CEO Cathie Wood and MicroStrategy CEO Michael Saylor. BlackRock‘s CEO Larry Fink is a “big believer” and $1.5 Trillion fund Franklin Templeton posts memes on X (formerly Twitter).
But, interestingly, retail investors aren’t yet buying into the hype.
A Deutsche Bank report found many expect the price of Bitcoin to fall below $20,000 in 2024, contrary to the industry’s upbeat expectations. Schwab Network anchor Oliver Renick called the ETFs an off-ramp for whales” rather than an on-ramp for retail investors.
Americans care about CBDCs — that is why former President Trump rails against them on his campaign trail — but not necessarily about whether cryptocurrencies can improve the financial system. They are still more associated with rags-to-riches stories and insider trading than achieving consensus between parties that do not know each other.