Bitcoin Price Collapse Drains Its FOMO Appeal – Bloomberg

bitcoin-price-collapse-drains-its-fomo-appeal-–-bloomberg

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Today’s Agenda

Bitcoin Tests the Diamond-Handed

Trading crypto is kind of like going to the Redneck Rave. It’s crazy-fun for a while, but every now and then you get impaled by a log.

After soaring 500% in 2020 and the first half of 2021, Bitcoin has collapsed 50% in two months. It recently suffered the dreaded Death Cross, which technical analysts consider a far worse omen than the Spider Eye, a signal I may or may not have just made up. Either way, it’s bad and suggests the coin could lose half its value again, because reasons. Nothing really makes sense with an asset jumpier than the Blue Holler Offroad Park after sundown.  

And with overnight Dogecoin millionaires turning back into overnight Dogecoin thousandaires, the FOMO that has fueled so much of Bitcoin’s rise has lost its sting, notes Lionel Laurent. Governments are giving Bitcoin the stink eye, and so is Elon Musk. Bitcoins are disappearing mysteriously. All the “fundamental” excuses for gambling on crypto — It’s a store of value! The dollar is dying! — keep collapsing one by one. Bitcoin will surely bounce back, like an overturned ATV in a mudhole. But watch for Death Crosses and impaling logs along the way.  

Pandemic Continues to Be Not Over

For most of the 20 years the Covid-19 pandemic has lasted so far, this newsletter has cautioned that waiting for its end would require patience. That’s obviously easier said than done. We gave the previous president a hard time for trying to rush the end of the pandemic, and the current president may have the same problem.

President Joe Biden plans to announce a “summer of freedom” this July 4, which is dangerously like a 47-year-old man declaring it’s “hot girl summer.” You’d better stick the landing, is all I’m saying. And in this case, large swaths of the country still have low vaccination rates, while the delta variant is spreading fast, warns Scott Duke Kominers. We’re all sick to death of this stupid nightmare, but it’s not over yet, not even in the relatively well-vaccinated U.S. Or the U.K.

It’s even further from over in the rest of the world, where vaccination rates are much lower, writes Clara Ferreira Marques. The 1918 pandemic took at least two years to burn out. At the rate we’re going, a two-year pandemic might seem like a lucky break.

Shortage of the Week: Airplanes

If you are fully vaccinated, you might want to reward yourself with a plane ride to some exotic location, such as the Blue Holler Offroad Park. Unfortunately, in this summer of freedom you’ll likely find air travel is even more annoying than you remember it being in 2019. That’s because there aren’t enough planes or pilots to go around, leading American Airlines to cancel and delay a bunch of flights this week. This has understandably made many U.S. taxpayers wonder where all that airline bailout money went. Brooke Sutherland explains the airline industry is a giant sinkhole into which people throw money, which is why air travel has gotten so terrible over the past 40 years. Without the bailout money helping raise the level in the sinkhole, air travel would be far, far worse today. If you can imagine.

Further Going-on-the-Fly Reading: 

Telltale Charts

So far all Brexit has done for Britain is hurt its currency, productivity and trade, writes Matthew Winkler. Otherwise, no notes.

Sick Man Among Major Currencies

The pound has depreciated more than any of its peers since the 2016 Brexit referendum

Source: Bloomberg

With balance sheets in far better shape than after the financial crisis, American consumers are about to start borrowing again, writes Conor Sen. Hot credit card summer, or something. 

Back in a Spending Mood

After a decade of paying down debt, rising home values have increased wealth in the U.S.

Source: Federal Reserve Bank of St. Louis

Further Reading

Down-payment aid is a better way to close homeownership’s race gap than easy lending. — Bloomberg’s editorial board 

A cheerleader and the Supreme Court just gave students a little more freedom of speech. — Noah Feldman

The Supreme Court keeps kicking Fannie and Freddie shareholders. — Matt Levine

Authoritarians are adopting the language of the Big Tech crackdowns happening in free countries. — Mihir Sharma 

The U.S. must root out corruption in Central America. It won’t be easy. — Shannon O’Neil 

Kids these days don’t want to work for banks because banks are regulated and boring. — Anjani Trivedi 

Maybe millennials are wealthier than other generations at their age, for some value of “wealth.” — Allison Schrager 

ICYMI

John McAfee died in a Spanish prison cell.

The housing market hits keep coming.

Tesla is struggling to make Solar Roof a thing. 

Kickers

A lot of birds are mysteriously dying

Archaeologists re-create cave lighting.

Want to avoid accidentally dating your cousin? There’s an app for that.

The myth of the lone genius is itself a myth.

relates to Bitcoin Is Rapidly Losing Its FOMO Appeal

Notes: Please send capybara bread and complaints to Mark Gongloff at mgongloff1@bloomberg.net.

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This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:

Mark Gongloff at mgongloff1@bloomberg.net

To contact the editor responsible for this story:

Brooke Sample at bsample1@bloomberg.net

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