I Was Wrong About Meme Stocks, NFTs, and Dogecoin
The less clickbait title: Learning to Love The Bubble.
The thing about bubbles–be they meme stocks, NFTs, or Dogecoin–is that, up until they burst, they can be incredibly fun. The world is a bit better when it’s bubbly.
What makes bubbles fun is that they redistribute wealth in an inimitable and chaotic fashion. While normally investing serves to redistribute money from the poor to the rich, a bubble redistributes money from those who bought the asset late to those who bought the asset early. Buying a meme stock before it quadruples, and selling it before it crashes, makes you a pretty penny. And since timing doesn’t correlate neatly across class lines, you get a lot of rich people losing money and a lot of poor people winning money.
And that’s incredibly fun! One of my friends, a voice actor, now has a net worth of six figures thanks to meme stocks. Another one of my friends, a sculptor, used the Dogecoin bubble to buy a house in cash. Hedge funds have lost a lot of money in the meme stock short squeeze. These are not the traditional winners and losers in society.
This is by no means justice. There will be a number of retail investors hurt by the inevitable meme stock crash. This is what makes bubbles unique: they redistribute from rich to poor, from poor to rich; they redistribute without regard to justice. And, in a system designed to transfer wealth from the poor to the rich, chaos can be equitable on accident.
I think meme stocks will hurt more people than they helped. I think GameStop deserves to go bankrupt and everyone should short it. I think that Bitcoin will roast the planet. But it is easy for my disdain for the particulars of these bubbles to coexist with my appreciation for bubbles in general: if this had happened with gold, Beanie Babies, tulips instead of assets with such potential for economic and environmental harm, I would be able to appreciate better the delightful scrambling of class politics.
I also understand that there are people who will never agree with me that blockchain and meme stocks are bad because the bubble has transformed their livelihoods. They are homeowners who never thought they could buy a home. And as someone who strives for balanced, accurate takes, I feel the need to empathize with this point of view, to show my understanding of what a bubble can mean for people.