I’ve had doctors, dental hygienists, doormen in my building and parents of kids on my son’s soccer and baseball teams all grill me about crypto and share their stories of trading bitcoin, ethereum and other more obscure digital currencies.
I’m not alone.
“I was talking to a school traffic cop recently and he started to go on about buying dogecoin,” Dan Pipitone, co-founder of brokerage firm TradeZero America, recently told me.
“There is definitely no lack of interest, especially once people make a little bit of money. For a lot of new investors, it’s just been a ride up,” Pipitone added.
But there are some investors who have a lot more than a couple of Benjamins at stake. That’s troubling because what’s going on with cryptos is a speculative mania, the likes of which we haven’t really seen since the late 1990s with tech stocks.
Now don’t get me wrong: It’s a good thing for people to be taking charge of their finances and investing for the future. It’s also okay to have some proverbial “fun money” in crypto assets.
But just like we saw during the late 1990s dot-com/Nasdaq bubble, there are too many people who may not really realize the risks they are taking and are getting in over their heads.
I’ve been covering the markets as a financial journalist since 1995. Back then, I also got peppered with investing and trading queries by friends and random people such as cab drivers, barbers and bartenders.
And Ask is one of the lucky dot coms. Scores of other tech startups crashed and burned. RIP to Webvan, eToys and theglobe.com. Not to mention Pets.com and its once ubiquitous sock puppet.
“When I have friends who do not work in financial services tell me it’s easy to make money, then that’s a bubble. It won’t end well,” Green told me. “People say it’s different this time. No, it isn’t. Many cryptos may go up like an escalator and down like a rock.”
Some long-term crypto bulls think that makes this a buying opportunity.
“Cryptos are here to stay. I do think the sector has grown up and transitioned to a wider audience,” said Jeremy Welch, chief product officer at Kraken, a cryptocurrency exchange.
But that’s precisely my point. You should never invest in something just because a friend at a party is touting it or you see stories about how much the price has gone up.
“People have to be okay with missing out,” said Ron L. Brown, president of R.L. Brown Wealth Management, when I asked him what he advises his clients, many of whom are professional athletes, if they want to buy cryptocurrencies.
“This is more like Vegas as opposed to investing,” Brown said.