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“The numbers are growing” is alive and well – and not just in crypto: Morning Brief
Here are the takeaways from today’s Morning Brief, which you can register to receive every morning in your mailbox accompanied by:
“The number is increasing.”
It’s one of several memes that emerged during a previous crypto wave, depicting a similar vibe to “to the moon” or “hodl” — the idea that devotees would continue to buy in the belief that prices would continue to rise. (It is also the title of Zeke Faux’s seminal book on cryptography.)
Crypto bulls have highlighted what they see as the fundamental drivers of the current rally, including the introduction of spot bitcoin ETFs last month (“a situation of buying the rumor and buying the event»); the next Bitcoin halved; and speculation about the approval of Ethereum spot ETFs. There is always something.
All this could well drive up prices. But it’s a safe bet that at least part of the recent enthusiasm is due to ouroboros-a type construct: people buy because they expect prices to continue to rise. Prices continue to rise because people are buying.
This mentality seems to have spread beyond the crypto world. Take a stroll through Yahoo Finance trends ticker page most of the time, and you will see many stocks rising. Part of this has to do with the current mania for all things AI (NVDA, HER, BBAI), but there’s more to it than that, and it feels different from the meme-driven cycle of 2020-2021. (On Tuesday, for example, Viking Therapeutics more than doubled, at the top of the trends page, thanks to the news of a promising study of a weight-loss medication).
Maybe it’s the “casino behavior» This is what Warren Buffett called for in his recent letter to shareholders: everyone wants to get rich by pulling the right lever. You can also, of course, call it FOMO trading.
That’s what Bill Capuzzi calls it. The CEO of Apex Fintech Solutions sees Gen Z and millennials as particularly vulnerable. Trading data from its platform showed that trading activity around these two generations’ Meta incomes jumped 175%, “reflecting the FOMO of younger generations.”
That said, he credits 20- and 30-year-olds for wanting to actively participate in their finances (and that’s his clientele, after all).
“Buying a mutual fund and putting it away for decades is not what the next generation wants,” he said in a note to Yahoo Finance.
Cryptocurrencies and Nvidia – even the S&P 500 – have taught investors that, indeed, “the numbers are going up.” (In the case of crypto, with a grueling winter in between, sure, but obviously it bounced back).
The story continues
Now come the cautious clichés: nothing goes up forever/in a straight line. Trees don’t grow to the sky. And amid all this excitement, investors shouldn’t forget one important question: “What’s driving the numbers down?”
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