I wrote in March that crypto could be looking at a bear market. Back then bitcoin was hovering around US$40,000. As I write this, bitcoin is below US$30,000. I’m sorry.
If we are in a true bear market, though, there will be more pain ahead. And signs are aplenty that we are heading in that direction.
Among those signs, possibly, is how bitcoin has entered the conversation around the Conservative leadership race, through the candidate Pierre Poilievre’s staunch support of it. That evokes a long-talked-about story of a seeming outsider whose sudden interest in a particular investment area portends doom.
Maybe Mr. Poilievre is the shoeshine boy.
This perhaps-true anecdote of a young blue-collar worker involves the investor Joe Kennedy, father of former U.S. president John F. Kennedy. Mr. Kennedy Sr. said he’d sensed the 1929 stock market collapse and the ensuing Great Depression because, one day, the boy who shined his shoes started giving him investment tips.
I personally never trust a man who doesn’t shine his own shoes, but Mr. Kennedy’s anecdote has lived on as one of those great investment adages.
There’s a similar scene in the film The Big Short, based on a non-fiction book of the same name. A character modelled on the investor Steve Eisman firms up his conviction about the bursting housing bubble after a stripper tells him she holds six hefty mortgages.
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Which brings us to Mr. Poilievre. He’s an educated man and his party’s finance critic, and obviously knows what he’s talking about. But that has never been in question, and this isn’t about that.
The moral of the shoeshine boy story is not about the specific kid and whether he had any business giving Mr. Kennedy stock tips. After all, we shouldn’t dismiss the boy’s acumen simply because of his profession. The issue is the trend that the boy represents.
If you meet one shoeshine boy who is into stocks, chances are, you didn’t meet the only one in the whole world with that particular passion. Mr. Kennedy’s take-away from that interaction was that way too many people not normally interested in the stock market had taken an interest in it.
This is what Mr. Poilievre’s bitcoin support…