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Dread, Despair, and Market Mania
What the current stock and crypto investment frenzies tell us about our societies and their inequalities.
Gamestop, weed stocks, Bitcoin and cryptocurrencies: a trading frenzy driven by small retail investors has taken hold of the world in early 2021. People who had never bought stock see their friends and acquaintances become overnight millionaires and want to join in on the action. Some will become rich; many will make a decent profit; more will lose all their savings.
Reading the discussions on online forums like r/WallStreetBets or r/Cryptocurrency paints a frightening picture. People are flocking to highly volatile assets in the hopes that it will make them rich fast and easy. Some complain that their investments don’t grow fast enough when they’ve done 5x in the past month alone. Others look at meme coins like Doge, an obscure humoristic cryptocurrency that Elon Musk gleefully pumped and dumped, and predict it will be worth as much as Bitcoin someday.
These people have no idea what they are talking about. Fundamentally, there isn’t that much to talk about at all. One should trade cryptocurrencies and stocks like Gamestop as momentum assets: you buy in the hype, sell the fear, rinse and repeat. If you’re catching the train early, you can make extraordinary returns. When things go South, though, you must sell quick.
What’s dangerous with the current mania is that it is partly motivated by a form of vengefulness. People resent hedge funds and billionaires and want to “get back at them.” They see their investment as a political and social statement. They praise “hodlers” and “diamond hands” (two terms that encourage people to never sell at a loss) as if clinging to losing assets was a statement of principle. It is not.
What we see today on the markets is a manifestation of deep insecurity and existential despair. People are suffering professionally and personally. This crisis took a toll on all aspects of our lives, but it’s only the tip of the iceberg. A global catastrophe looms in the not-so-distant future: climate change. The elites of the world, our governments, nobody seems to care all that much about it. We’re running straight at the cliff with seemingly no intention to stop.
Becoming rich fast is the only hope we have to enjoy ourselves a bit before it’s too late. Climate change will alter more than weather patterns: it will completely change our civilization. What it will become in the “afterworld,” nobody knows. What we do know, however, is that until it happens, we’d better enjoy and secure ourselves as best we can.
That’s why this market mania is unlike others in the past. This one isn’t motivated by greed alone. Desperation propels it; existential dread fuels it. As such, it is much more dangerous to all those who bet more than they can lose in the hopes of winning more than they could spend.
