Cryptocurrencies Are Digital Tulips

Stocks sold off today partly as a result of the turmoil in cryptocurrencies markets. It was a risk-off day.

Here is what I wrote in our May 11, 2021 Morning Briefing about this asset class: "I had been thinking of cryptocurrencies as 'digital tulips,' reminiscent of the 17th century tulip mania in Amsterdam that drove up tulip prices beyond reason. The difference is that cryptocurrencies are traded 24-by-7 around the world. On second thought, they might be more like a financial virus that won’t stop until enough speculators have been infected that herd immunity is achieved." Or perhaps, cryptocurrencies are the dotcoms of the 2020s.