Greenlight Capital’s David Einhorn believes the current bull market has taken speculative behavior to absurd levels.
“We’ve entered the ‘Fartcoin’ stage of the market cycle,” Einhorn wrote in an investor letter as reported by CNBC.
“Beyond trading and speculation, it serves no meaningful purpose or satisfies any need not already addressed elsewhere.”
David Einhorn has declared we’ve hit the ‘Fartcoin’ phase of the market cycle. Is this a sign of market exhaustion or just a quirky commentary on crypto trends? Stay tuned for what’s next! #Crypto #Investing #MarketTrends
The term “Fartcoin” originates from a crypto token that gained immense popularity, coinciding with Donald Trump’s re-election.
The meme coin now boasts a market valuation nearing $2 billion, surpassing the worth of many publicly listed U.S. companies.
Since Fartcoin’s debut, other meme coins have emerged. Among them is $TRUMP, a token launched by President Donald Trump on the Solana blockchain.
Over the weekend, $TRUMP’s market cap surged past $14 billion, despite experiencing volatile trading that saw losses of over 20%, later narrowing to around 3%.
First Lady Melania Trump also introduced her cryptocurrency.
The $MELANIA cryptocurrency appears to prioritize personal branding over financial gains.
Its website underscores that the token is not designed as an investment vehicle or security, echoing a similar disclaimer made for $TRUMP.
Melania Trump’s foray into crypto also underscores the Solana blockchain’s increasing appeal.
Known for its scalability and low transaction costs, Solana has positioned itself as a go-to platform for innovators aiming to create unique digital assets.
$MELANIA’s market valuation remains modest compared to the broader crypto space, raising questions about the long-term viability of such niche tokens.
Einhorn said,
Perhaps we’re transitioning from the Fartcoin phase to the Trump (and Melania) memecoin phase. What comes next is anyone’s guess, but it seems like the ride will only get wilder.
Einhorn’s comments come as investor optimism about tax cuts and deregulation under the Trump administration drives equity markets higher.
The Dow Jones Industrial Average rose more than 400 points the day after the inauguration, while the S&P 500 and Nasdaq Composite climbed 0.8% and 0.7%, respectively.
Betting against crypto-linked ETFs
Greenlight Capital capitalized on the crypto frenzy in the fourth quarter by shorting leveraged bitcoin ETFs.
The firm targeted two funds: the T-Rex 2X Long MSTR Daily Target ETF (MSTU) and the Defiance Daily Target 2X Long MSTR ETF (MSTX).
These funds aim to deliver double the daily returns of MicroStrategy, a software company heavily invested in Bitcoin.
Einhorn explained that the funds struggled to meet their goals due to MicroStrategy’s volatility and the limited availability of derivatives needed for leveraged returns.
Greenlight shorted these ETFs while simultaneously holding MicroStrategy stock as part of an arbitrage strategy, which Einhorn described as a “material winner” for the firm.
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