Crypto pioneer Barry Silbert isn’t feeling the cryptosphere these days.
Most cryptocurrencies — 99 percent– are overpriced, Silbert said a tweet to Bloomberg digital news Executive Editor Joe Weisenthal.
Silbert is the founder and CEO of venture capital company Digital Currency Group (DCG), the crypto powerhouse behind the Grayscale Bitcoin Trust, among other things. He said he expects “macro fireworks” as a result of elevated risks such as inflation.
Silbert tweeted, “I’ve gone long the VIX (via $UVXY) to prepare for the macro fireworks”
When Weisenthal asked what kind of “fireworks,” Silbert replied, “no clue what will be the spark, hence the volatility hedge. but food prices, oil prices, investor complacency, speculative excess, lack of trust in the fed, interest rate normalization, meme stocks, overpriced cryptos, etc. are all on my mind”
Weisenthal queried Silbert, “You think cryptos are overpriced generally or just a bunch of sh*tcoins that have no business being where they are?”
Silbert answered bluntly, “99% are overpriced”
Just last month, Silbert said he took a short position in Dogecoin, and earlier this month said he said he expected the hot meme cryptocurrency to drop below a $1 billion market capitalization, Benzinga reported.
So why are the highly volatile cryptos so expensive?
Like any currency, cryptocurrencies are valued based on the scale of community involvement such as user demand, scarcity or a coin’s utility, NAGA reported. Most of the digital coins on the market are issued by private blockchain-related corporations and are scarce. There is a finite nature to some digital coins. For example, the finite supply of Bitcoin never reaches beyond 21 million coins. The most popular crypto on the market, bitcoin in great demand because of its finite number, and its value is rising.
In an effort to increase their value, some cryptocurrencies are practicing a so-called “burning” mechanism, destroying a part of the coin supply.
Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?