Bitcoin Has an Unusual Relationship With Volatility

Cryptoassets are showing the signs of a bubble. Market capitalization is $222 billion, 16 times as much as a year ago, with no significant change in tangible economic value. The virtual currencies elicit investment excitement and breathless news coverage; sober analysis treating both technical issues and economic fundamentals is rarer.

There is incessant cheerleading by people who own cryptoassets, manufacture them or sell associated services. A prominent example is the Amazon best-seller "Cryptoassets,"1510952163329 which is filled with classic financial hype and bubble logic. The book offers no clear evidence that investors will realize value from buying these assets today. There is no discussion of exit strategy, no speculation about who will pay to deliver profits to current investors.