A Life-Changing Bet

You’ll be kicking yourself after reading this.

I know I’m certainly playing the ‘what if’ game after reading about this news.

It concerns people who have parlayed a few dollars into millions and, in some cases, billions of dollars in less than a year.

Not surprisingly, it involved cryptocurrency, and most probably one that you have never heard of.

It is called Shiba Inu ($SHIB) and it’s what’s known as a ‘meme coin’. It’s also named after a breed of dog.

Thanks to some incredible marketing and the fear of missing out, $SHIB is now the 11th largest coin by market capitalisation.

The official cryptocurrency jargon for a coin like this is ‘a sh*t coin’, meaning it has no real value or utility. It suggests it also has a limited future, but that doesn’t stop the punters from cashing in.

As you can see from the image below, one fortunate speculator turned US$8,000 into US$5.7 billion!


Morning Brew

Source: Market Watch

[Click to open in a new window]

It’s a staggering amount of money, and because every transaction on the blockchain is traceable, records like these are accurate.

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Another punter purchased US$17 worth of this coin and rode it to a US$6.5 million-dollar payday.

This is the stuff of dreams and is the equivalent of winning the Lotto jackpot a few weeks in a row. It’s also a lesson in psychology.

My guess is that individuals like the traders mentioned above are already wealthy. In the case of the first one, they’re probably already a billionaire bitcoiner.

That’s based on my experience with how humans react to windfall gains.

Only someone with huge reserves would hang on to something like $SHIB for a multibillion-dollar ride.

A wealthy person can watch their small investment grow to many millions because their lifestyle or wellbeing doesn’t depend on it. For the rest of us, the temptation to ‘lock-in’ profits often proves too tempting.

The internal sales pressure happens when people double their money quickly. And as the multiples get bigger, so does the motivation to sell.

Where investments don’t generate income for the holder, they are essentially betting that prices will continue to rise. We’ve all heard or read stories of price collapses in stocks, bonds, commodities, and crypto. It also happens in real estate markets when credit is tight, business is slow, or people lose confidence in keeping their jobs.

But right now, it seems you can bet on anything with the expectation the price will go up. That’s the product of too much money sloshing around in the system and a sense of reckless abandon.

It works well…until it doesn’t.

At least for the lucky $SHIB punters, the little bets seem to have paid off big time. That’s if they’ve been fortunate enough to find someone willing to buy the stuff.

It’s known as the greater fool theory!

Enjoy your weekend.

Best,

Cory Bernardi,

For The Rum Rebellion

PS: The Rum Rebellion is a fantastic place to start your investment journey. We talk about the big trends driving the Australian Economy. Learn all about it here.


As a member of the Liberal Party of Australia for over 30 years, Cory fought to support Sir Robert Menzies’ vision of stronger families, fostering free enterprise, limited government and supporting civil society for the ‘forgotten people’.

He is currently Chairman of the Bernardi Family Investment Office and provides regular current affairs commentary on Sky News Australia and other media outlets.


The Rum Rebellion