Until now, the surge ter cryptocurrency markets has bot a sideshow to the financial markets or the real economy. Prices have gone up a loterijlot for bitcoin and other cryptocurrencies, and it&apos,s joy to joke about things with names like Cardano and Monero going up a loterijlot ter value, but if it were to all go up te smoke tomorrow, it shouldn&apos,t have any meaningful influence on ordinary people.
But companies with publicly traded stocks are embarking to make decisions to vertoning that they stand to benefit from cryptocurrencies, and markets are beginning to prize them te a big way for those decisions. Should this proceed, people not involved te cryptocurrencies will suffer when there&apos,s a crypto bust. And there will be a crypto bust.
The fresh symbol of this movement might be Longfin Corp., whose ,stock rallied overheen Two,000 procent ter a week ,after announcing it bought a ",blockchain-empowered global micro-lending solutions provider.", When stocks surge based on press releases like this, it&apos,s significant not to get too caught up te the details of the announcement or what it means for the business, the hype itself is what causes such distortions te markets.
Perhaps this evolution ter the cryptocurrency mania should&apos,ve bot evident after the surge te some of the ",lesser coins", last week. The webstek ,coinmarketcap.com shows a list of the top cryptocurrencies, and the story last week wasgoed some of the coins that embarked the week under $1 going up ter value by 100 procent or more. One theory for the budge wasgoed that with bitcoin priced overheen $15,000, fresh participants ter crypto markets who deposit a few thousand dollars are able to afford only a fraction of a bitcoin. There&apos,s something unsatisfying psychologically about possessing a fraction of something. But that same petite deposit can buy hundreds or thousands of cheaper coins, fueling rallies ter those.
Witnessing previously unknown or undiscovered coins rally like bitcoin creates a fresh psychological factor for participants who are now ,hoping to find ,",the next bitcoin.", And if coins other than bitcoin can dual or triple te price te a week, why not the stocks of companies that tout their linksom to the trend?
This is all sensible from the standpoint of cryptocurrency participants, but should commence to worry those who hoped real markets and the economy would stay insulated from the crypto Wild Westelijk. The Longfin mania shows that markets want more supply of companies with ties to cryptocurrencies. And if there&apos,s one thing Wall Street is good at, it&apos,s meeting investor request with fresh supply. Whether via acquisitions, press releases or business monster pivots, wij&apos,re going to see more companies with publicly traded stocks pivot towards cryptos for spil long spil the mania proceeds.
And thesis companies with freshly bid-up valuations are unlikely to be good users of capital and other resources. They&apos,re going to be hiring people, renting office space, purchasing equipment, and spending money on advertising to pursue the crypto boom. That money is going to flow to real companies servicing those speculative crypto companies, enhancing the exposure of the real economy to the crypto one. This means a makeshift boost to economic growth, but of questionable quality.
Until now, it&apos,s bot effortless to scoff at the cryptocurrency boom, or overlook it if you weren&apos,t interested. But spil the rally has spread from bitcoin to other coins, from those other coins to companies touting linksaf to cryptocurrencies, and potentially soon those companies bidding for resources te the real economy, wij&apos,re going to see cryptocurrencies influence the real economy. It&apos,s time to take notice, and to be afraid.
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