Bitcoin is down worth $35,000 and while I’m pretty skeptical on bitcoin/crypto, it’ll probably go up.
And the reason is beanie babies.
Beanie Babies launched in 1993, by Ty Warner and by 1998, they had over 1.8 billion in sales.
Reason was Ty previously worked for the plush toy company Dakin and he was for 15 years consecutively the companies number one salesman.
When he launched, he already had a personal relationship with every single big retailer/distributor and had a solid knowledge of what kids wanted.
One strategy he had was “retire” high selling beanie babies, making the claim people needed to buy them soon or they’d be gone.
Never mentioned the company made nearly identical versions with some color/size changes and they had tens of thousands in storage, in case demand needed it, but that was the claim.
So a woman named Becky Philips was a school teacher who decided to purchase 30 “Chilly the Polar Bear” dolls for $7 each.
She sold each one for $1,800 within two months.
She and her friends purchased more and some media caught wind of the return, where now collectors and even alternative investors jumped in.
Becky & friends reported within a year they made $300,000 off Beanie Babies.
And for years, that market was just a giant scam zone, preying on people in the early days of the internet.
People would put Beanie Babies up for sale, buy them from themselves, tell stories of price gains/rapid sale times and others invested.
And it looked very similar to Bitcoin today.
Investor magazines devoted to Beanie Babies.
CNBC covered the price changes regularly.
Conventions were setup.
All for a plush toy.
A technology over a decade, which actually took already established tech that has been around since the 90s and added some changes to rebrand it as the ”blockchain”.
Launched with a value under $1 and was used mainly by drug dealers, anarchist activists and wonky computer people.
2011 was a price hike, where it went from an activist idea to $30, in which many people began hearing stories of random people who bought it for $0.10 make tens of thousands of dollars.
2013
2017
2020/2021
All had these periods, where Bitcoin explodes for a few months, millions of new buyers jump in and some brag about making money, while many others avoid saying they lost.
Right now the price is crashing, but there is a comparison with how Beanie Babies look 20 years later in how crypto could look.
It’s still sadly around.
While the crazy isn’t even 5% of what it was, there are still a community of investors seeking $5,000 for a Beanie Baby on eBay and hey, maybe someone makes some money.
Simplest one I can give is this.
People who bought for $10,000, will not sell for $0.
An example of this being in 2014, when Mt Gox, which was the largest bitcoin exchange shut down and thousands of people lost hundreds of millions in bitcoin, which would be worth billions today.
There was an entire sub market in the crypto community of people selling their Mt Gox accounts, hoping someone would buy it and they’d take the gamble Mt Gox figured it out.
The average for the first month was people selling for about 50% on the dollar value of the bitcoin in the accounts and as time went on, it dropped to people selling it for not even 10%.
That said, a large portion of Mt Gox investors held, because they’d refuse to sell what they paid $10,000 for at $1,000, even if the likely outcome was $0.
This happened with Beanie Babies, where it’s clearly just a product of the cult of easy money, but decades later, that community doesn’t care and will try to monetize.
For Bitcoin, I ultimately don’t see this working and do think an eventual moment happens where the hype drops, due to years of stagnant returns that don’t please initial investors.
That said for this particular crash and the long term future, there will always be people who refuse to sell for $30,000, because they bought it at $60,000 and that makes returns likely for things to keep going back up, even if it shouldn’t.
So for Bitcoin now, I’d not be shocked if it dropped under $20,000 and went back into the $10,000 zone, the same way I’d not be shocked if it rose to $100,000.
And I’d be very surprised if we don’t see both happen in the next three years, because well, this all makes about as much sense as an $1,800 Beanie Baby.
