Not an inflation hedge nor a store of value. Just another risk asset. The problem is as QE ends and rates rise, will it still see a strong inflow of money? I think not.
It's not the end crypto, but new highs could be some way off.
[caption id="attachment_34522" align="aligncenter" width="761"] Robinhood since listing vs. Purple Group[/caption]
|(Nasdaq code: HOOD)||Purple Group* (JSE code: PPE);|
|Listed July 2021 at $38, hit $85 and now under $10 (-75%)||July 2021 145c, high since 350c and now 260c (+81%).|
|Makes most of their revenue from selling the deal flow and Gold accounts.||Revenue is from transactions.|
|The majority of transactions are in options or crypto.||The majority of transactions are in equity, but crypto, EC10, is growing.|
|Needed a quick $billion to settle meme stock trades.||The balance sheet is fine.|
|Huge repetitional damage when they halted trade in some meme stocks.|
|Value traded by clients has been falling since Q1 2021.||Value traded by clients fell in the last set of results.|
|Not yet profitable.||Profitable, PE ±50x.|
|Users declined in 2022.||Users grew in last results to +1million active accounts.|
|Market cap per user = $478 (ZAR7,400)||Market cap per user = ZAR3,263|
|Revenue per user (2021) = $80 (ZAR1,250)||Revenue per user = R109|
There comes a point at which a commodities price is simply too high and the price itself reduces demand. Depending on the commodity high prices often need to be high for protracted periods of time.