Fed cuts (or, more accurately, the expectation thereof later this year) are “sparking animal spirits.”

So said BofA’s Michael Hartnett in this week’s installment of his popular “Flow Show” series.

Maybe equities will take a break after one of the more pronounced four-month rallies in a decade, maybe they won’t, but if you’re the Fed and you think financial conditions matter in the pursuit of lower inflation, you haven’t done yourself any favors by fostering froth. Froth like that illustrated in the figure below.

Suffice to say the cryptoverse is back at it. And in a big way. Bitcoin’s gunning for new records, leverage is coming back into the space, DeFi’s stirring and so on. I’m sure most readers are aware.

I can’t say my feelings are hurt. I still have Bitcoin, Ether, Avalanche and Solana left over from my early-2022, short-lived, three-month experiment in all things crypto. As regular readers will fondly recall, that experiment included a deep-dive into DeFi and Web3 more generally. I bought some NFTs too. No cartoon monkeys. Rather, photography NFTs.

The rationale for spending roughly $10,000 on tokenized, blockchain-based photographs went something like this. It was a way to participate in any remaining NFT mania upside while helping struggling photographers. I like photography. I’ve bought some expensive photographs in my lifetime. Notwithstanding my annoyance at the hard sell from a few overzealous photographers high on their own Ether-based supply, I was more than happy to toss some money at aspiring artists. I never sold those. Not that I could’ve sold them. They’re completely illiquid. And by “completely” I mean there will never be any bids for them under any circumstances.

Let me reiterate a couple of key points for those of you who’ve emailed me recently inquiring as to my thoughts on Bitcoin and crypto more generally now that the crypto “winter” appears to be ending, or at least thawing, thanks not just to expectations of easier US monetary policy, but also the long-awaited approval of Bitcoin ETFs. Fair warning: Some of you won’t like what I have to say, but the rest of you will get a laugh or two, and that’s a trade off I’ll make any day of the week.

First, these (still) aren’t assets. And they never will be. At the most basic level, all of this (all the coins and everything to do with them) is bullshit. Blockchain’s just a shared Google Sheet. A publicly-accessible Excel document. It has no serious applications for anything, it’s not a technology at all let alone a revolutionary one, and I’ve tried desperately to find evidence to the contrary with nothing to show for my (wasted) time. On the coins, there’s some nuance. The tokens are actually a bullshit continuum where Bitcoin is on one end and DeFi tokens are on the other, Bitcoin being far and away the closest thing to an “asset” that the cryptoverse has. It (Bitcoin) isn’t subject to the same sort of Wild West casino shenanigans associated with DeFi, which is just a digital saloon. That said, I still don’t see a case for buying Bitcoin beyond the greater fool theory. But here’s the thing: My back-of-the-envelope math suggests this world’s roughly 97% fools. Seen in that light (i.e., considered in the context of near universal inanity and daftness), Bitcoin $1 million might materially understate the upside.

Second, crypto acolytes rely heavily on “nonbelievers” not knowing anything about the space. The Luddite jokes dry up real quick when you show such folks a MetaMask wallet with more “diversification” (an absurd euphemism) than theirs and more Ether. Relatedly, the vast majority of people claiming to be crypto magnates are in fact poor, both in terms of crypto and in terms of real money too. They do silly things in an effort to hide that. For example, they’ll take screenshots of expensive NFTs that are “worth” (note the scare quotes) more than their homes and use them as social media avatars despite not owning them. That’s pathetic enough on its own, but immeasurably more so when you get the joke, which such people invariably don’t: The fact that you can fool virtually anyone into believing that you own a $300,000 cartoon monkey simply by right-clicking on said monkey and saving him (or her) as a .jpg speaks volumes about how silly this whole thing really is. I can buy five Cézanne reproductions, frame them and post pictures on social media, but exactly nobody’s going to believe that my living room is home to Cézanne’s most famous works.

Third, the fact that crypto imploded in spectacular fashion, exposing all sorts of fraud in the process, during an inflationary episode that prompted central banks to raise the price of real money aggressively, blew up the idea that crypto’s an inflation hedge, and it also suggested quite emphatically that crypto’s value is closely and inversely related to the price of real money. Or at least to near- and medium-term expectations for the price of real money (note that by “real money” I just mean government-issued money). Real money at 5% was enough to collapse the entire crypto ecosystem, inclusive of sundry DeFi ponzi schemes and NFT valuations, and virtually overnight at that. Bitcoin survived. So did Ether. The rest survived technically in the sense that you can still trade them, but here’s a question: What happens to this space if, for whatever reason, the Fed were forced to raise rates to 7%? Or 10%? Or 15%?

Fourth, the fact that the crypto rally was rekindled when the Fed pivoted isn’t indicative of crypto as a debasement hedge, it’s indicative of the fact that crypto’s a speculative “asset” (more scare quotes). Like all other speculative assets throughout human history, crypto tends to appreciate when the price of money’s expected to be lower. Crypto isn’t preemptively responding to “debasement” in the current rally. It’s responding the relief from the rate-hiking cycle and expectations of cheaper real money (and thereby cheaper leverage, etc.) going forward. That’s obvious to the point that it shouldn’t need stating.

And that’s it, folks. I’m not especially inclined to dignify crypto with additional coverage unless it becomes absolutely necessary. To reiterate: I dedicated copious amounts of time and editorial attention to crypto, DeFi and everything to do with Web3 two years ago. I gambled $20,000 to learn about the space. And I put up a lot more than that in total, which is to say above and beyond the throwaway DeFi/NFT money, I dedicated a larger sum to buying Bitcoin, Ether, Avalanche and Solana to hold over the longer-term. Why? Why would I want to own bullshit for the long-term? Because, as noted above, this world’s overwhelmingly populated by fools, and crypto’s perhaps the greatest greater fool theory bubble in world history. If you want to pump money into it and make me richer, then by all means. But don’t tell me I don’t know what I’m talking about when it comes to crypto. I buried that criticism two years ago.

In 2022, when I was knee-deep in Web3, I went out for lunch with the owner of the barber shop immortalized in “Oblivion.” He’s a reformed convict. A Hispanic fortysomething covered in tattoos who spent more than a quarter of his life in jail for various offenses, some of them quite serious, but none of them odious (nothing he couldn’t come back from). Now, God bless him, he’s a minor local celebrity thanks to the cult following he built at his small business. It’d be too much to call him a pillar of the community, but he’s a better citizen than I’ll ever be. The NFTs came up over BLTs by the beach. That naturally led into a discussion of crypto. “It’s Ponzi, dude,” he told me. “Yeah, I realiz–” He cut me off and pointed to one of his face tattoos: “I know scams,” he said. “And that’s Ponzi.”