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Originally Posted by goofyballer
This story is amazing. Hard to pick out the best part, but this was good:
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Mr. Hummer went out to meet Joe Buttram, 27, for drinks. As a mixed martial arts fighter, Mr. Buttram said he would fight for a couple hundred bucks, sometimes a few thousand, and worked security at a start-up, but his main hobbies were reading 4chan and buying vintage pornography, passions that exposed him to cryptocurrency.
He said his holdings are into double-digit millions but wouldn’t give specifics other than to say he’d quit his job and is starting a hedge fund. There’s a common paranoia among the crypto-wealthy that they’ll be targeted and robbed since there’s no bank securing the money, so many are obsessively secretive. Many say even their parents don’t know how much they’ve made. This also allows people to pretend to be wealthier than they are, of course.
I don't know how many people here were around for the dotcom boom/bust, but this seems to be perfectly mirroring that era. Like, Long Island Tea changing its name to Long Bitcoin? Just a ripoff of firms adding dotcom to their name. It was even studied by academics in the most prestigious journals:
Cooper, Michael J., Orlin Dimitrov, and P. Raghavendra Rau. 2001. “A Rose.Com by Any Other Name.” The Journal of Finance 56(6): 2371–88.
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We document a striking positive stock price reaction to the announcement of corporate name changes to Internet-related dotcom names. This “dotcom” effect produces cumulative abnormal returns on the order of 74 percent for the 10 days surrounding the announcement day. The effect does not appear to be transitory; there is no evidence of a postannouncement negative drift. The announcement day effect is also similar across all firms, regardless of the firm's level of involvement with the Internet. A mere association with the Internet seems enough to provide a firm with a large and permanent value increase.
On top of generating a ton of ill-deserving millionaires, the dotcom bubble generated an enormous number of terrible research papers, and I assume alt currencies are going to do something similar.