Anyone notice how fast asset prices moved up in certain realms? We live in a world where the last price of a trade determines the marketcap, when any savvy investor should know that there's no realistic way that the entire float or inventory can be sold at that price.
Everything feels like musical chairs is being played and everyone has to fight over 5 chairs, but only because 95 chairs are sat in even when the music starts playing. And when it all goes to shit and no one wants your chair, everyone just starts playing somewhere else!
Investing in the hottest thing becomes quite a self-fulfilling prophecy when enough people hop on the train. This is especially true for relatively illquid assets, because no one wants to let go of what they have when the market is going up.
In the case of crypto we see scenarios where much of the inventory is locked up in ancient untouched cold wallets, so what's traded is but a fraction of the total coins out there, yet the marketcap is calculated off of the entire possible inventory. Kind of absurd if you think about it.
And the same could be said of many equities! There you'll also find many cases of stocks blowing through new all time highs when upwards of 75, 80, 85% are institutionally held, similar to the ratios of coins held by similar entities that may move on slower timescales than the average momentum chaser with a credit card and a dream.
Don't even get me started on house prices. Same story there, in fact banks sat on inventory for years trying to keep prices higher than where they should be. Restrict the supply of what can be traded and what little demand exists has to fight over something that is less scarce than it is made to appear.
I honestly don't even know what the best way to preserve any sort of capital going forward is, this isn't something that's ever happened before and it's all happening on a global scale. I'm not so sure that a completely clean slate for everyone would be the least messy way of dealing with everything. I just know that I don't want people to suffer unnecessarily. Things could be a lot simpler but here we are, overcomplicating things time and time again.
