"It's just money. It's made up. Pieces of paper with pictures on it so we don't have to kill each other just to get something to eat. It's not wrong. And it's certainly no different today than it's ever been. 1637, 1797, 1819, '37, '57, '84, 1901, '07, '29, 1937, 1974, 1989--Jesus, didn't that one fuck me up good. 1992, '97, 2000, and whatever we want to call this. It's all just the same thing over and over. We can't help ourselves. And you and I can't control it, or stop it, or even slow it. Or even ever-so-slightly alter it. We just react. And we make a lot of money if we get it right. And we get left by the side of the road if we get it wrong."
--John Tuld (Margin Call)
In the 1600s, Dutch speculators bid tulip bulb futures to spectacular heights. As prices rose, the value of one tulip bulb equated to annual salaries and even scenic homes. Not surprisingly, demand for bulbs and prices subsequently collapsed, causing ruin among leveraged speculators. The event, often referred to as 'Tulipmania,' is held up as an early example of a speculative financial market bubble.
Obviously, a captivating aspect of Tulipmania is how people could have been stupid enough to sink life fortunes into something as mundane as garden flowers.
I suspect that we will be wondering about the Bitcoin phenomenon in a similar fashion. When crypto prices ultimately collapse, the question will be how people could have been idiotic enough to sink fortunes into a construct that only existed on a computer?
That question will occupy the post-bubble autopsy crew for some time.