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."
The solution?
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 salvo flies in the face of much talk about "crypto going mainstream" off the back of Spot Bitcoin ETF approvals.
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.
What's Next: Bitcoin is bouncing back on easing sell pressure, up 5% in the past 24 hours. The "unhinged casino market" may stay around for a few memecoins longer.
Image: Pixabay
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