I still see many people still calling crypto a bubble and thus it is unsustainable. I mean the price rise looks pretty crazy...
The same with tech stocks and their "overvaluation"....
I remember personally saying the same about Amazon, pretty much since inception.
But I didn't get it was not a discounted cash flow business but a future potential cash flow business - a network effect stock valued on Metcalfe's Law. And thus it was exponential in nature and required log chart to understand....one bubble 2000, the rest normal...
And the NDX is the same - one bubble in 2000 and the rest, normal and correctly priced.
And Bitcoin is the same...one bubble in 2013 and a mild one.
It's a new business model - network effects. It forces us to re-think valuation and 30 years of outperformance over time suggests we cant ignore it and write these trends off as bubbles. But they are volatile and that is ok as there is no reward without risk.
And that is all without using one chart of the Fed balance sheet as a denominator 😜
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