The $72,000 level was just the latest in a series of recent highs for bitcoin. For more than two years bitcoin struggled to approach the previous record of $69,000 set in November of 2021. Over the last few weeks, however, the price of bitcoin has climbed steadily.

Climbed steadily on average, that is. As has been the case since its inception, bitcoin continues to have wild price fluctuations, often with no immediately evident cause.

For instance, from March 3 to March 4, bitcoin’s price jumped by nearly 10 percent. By March 5, it had given back nearly all of that gain. Such a three-day swing is far from atypical for the original cryptocurrency.

Some of the recent gains can probably be attributed to the SEC’s January approval of the first bitcoin exchange-traded funds. Bitcoin ETFs make it easier and less risky for individual and institutional investors alike to take a financial position in the cryptocurrency asset class. With billions flowing into the new bitcoin ETFs, it is not so surprising that the price of bitcoin would swell.

Similarly, a major financial regulator in the United Kingdom just gave the green light to a new crypto-backed investment vehicle. This will mean even more money pumped into bitcoin and other types of cryptocurrency.

While those holding bitcoin certainly are not complaining about the new price record, this is far from unalloyed good news. Anything will go up in value if more people want it than currently have it, and if new entrants into the market are willing to pay a premium. Demand seems to be behind bitcoin’s new $72,000 price record.

Still, no one has really been able to satisfyingly articulate why demand for bitcoin should or will continue to go up and up forever. Yes, there is a limited supply of bitcoin — at some point there will be no more bitcoin mining. But there is a limited supply of lots of useless things that don’t perpetually go up and up in value.

Some financial firms are setting truly absurd price targets for bitcoin based on the recent price gains. A few even try to justify them: Ark Invest was among the firms approved to launch a bitcoin ETF, and Ark’s director of digital assets says use cases like serving as a hedge against inflation, making global payments, and being a “store of value” outside of central banks and governments will help to add to bitcoin’s market value over the next decade (Ark has put out a long-term bull case estimate topping $1.3 million per coin).

Except it’s logistically almost impossible to pay for anything other than a ransomwear attack using bitcoin, your value is much safer stored with central banks and governments than in cryptocurrency, and there are ways to hedge against inflation that, unlike bitcoin, have some kind of intrinsic value behind them. These same use cases for bitcoin were cited when it first came about well over a decade ago, and none of them have really played out in real life.

This April a so-called “halving event” will take place, and some analysts have cited this as another justification for ambitious price targets. In a nutshell, the halving event means that bitcoin miners will only get 50 percent of the supply of bitcoin they are being awarded today — instead of 900 bitcoin a day, within a couple months miners will only be able to sell 450 bitcoin a day.

A supply restriction like the halving event could indeed help temporarily prop up bitcoin’s price. Yet, again, if the price of bitcoin is based solely on demand having to outstrip supply forever, with very few outside the world of organized crime actually using cryptocurrency for anything practical, that is not a long-term recipe for success.

For now, though, congratulations to the bitcoin bulls out there on a new price record. Hey, you might even want to consider cashing some of that bitcoin out for actual currency which you can then use to buy something nice.

Jonathan Wolf is a civil litigator and author of Your Debt-Free JD (affiliate link). He has taught legal writing, written for a wide variety of publications, and made it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.

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Whether AI is, in fact, an existential threat to humanity remains an open, if rather pressing, question. What is not open to question is whether it should pose an existential threat to Cathie Wood’s reputation for clairvoyance when it comes to the next big thing in tech.

Nvidia shares have risen more than 30% since the company reported earnings on May 24, and the stock touched a $1 trillion dollar market cap on Tuesday.

Wood and Ark sold their holdings in Nvidia back in January. Since, Nvidia's stock has more than doubled as investors have dubbed the company the clear leader in the AI chipmaking arms race.

Which is a pity for ARK and its investors, as that rally would have helped plug the $2 billion hole Wood blew into the exchange-traded fund’s bottom line over the last few years, to say nothing of the $10 billion she’s lost for her clients since ARK Innovation debuted. (Not that Wood’s weeping too much, given that she’s charged $300 million in fees for the effort.)

Of course, you’d be forgiven for failing to realize Wood’s fuck-up by reading her tweet on the matter.

"Since 2014, @ARKInvest has believed that Nvidia saw the AI future before most other chip companies, and now we believe it will continue to power the AI age. At 25X expected revenue for this year, however, $NVDA is priced ahead of the curve," Wood tweeted.

That’s a pretty unusual argument for the patron saint of big numbers built on small ones, as Bloomberg’s Shuli Ren is only too eager to point out.

It’s interesting that Wood is starting to complain about lofty valuations, which she did not shy away from in the past. She famously had a $3,000 price target for Tesla Inc. and was sticking with $1 million Bitcoin forecast earlier this year….

Frankly, Wood’s defense is unconvincing…. Of all people, Wood should know that a trading frenzy can send asset prices to euphoric levels. Compared to the run-up in the ARK Innovation ETF — or Bitcoin — three years ago, what Nvidia experienced is not extraordinary.

Indeed, it seems those who actually want to make money should be following the sage advice of a different tech guru, albeit one who Wood’s fans aren’t likely to like very much.

Steve Cohen's hedge fund has likely scored a $100 million gain on Nvidia in just two months…. Cohen, the owner of the New York Mets, urged investors during a recent conference not to worry so much about a recession that they miss the boat on AI, sources told Bloomberg. He described the burgeoning technology as a "big wave," and predicted it would create new jobs as well as eliminate existing ones.

Cathie Wood calls Nvidia stock 'overpriced' after missing 2023 rally [Yahoo!]
Even Cathie Wood Can’t Spot the Next Bull Market [Bloomberg]
Steve Cohen's Point72 fund has likely scored a $100 million gain on Nvidia stock in 2 months as the AI craze persists [BI]
Nvidia Touches $1 Trillion Mark After Beating Rivals to AI [Bloomberg via Yahoo!]
Nvidia CEO Gets Rock Star Reception in Taiwan With AI Stock Surge [Bloomberg]
A.I. Poses ‘Risk of Extinction,’ Industry Leaders Warn [NYT]

In other words: It’s a perfect time to jack your already lofty fees into the stratosphere.

The firm, with about $60 billion under management, is raising performance fees -- its cut of investor profits -- for the Oculus, Composite and Valence funds by 5 percentage points starting in July, according to a person familiar with the matter. Investors will pay 30%, 35% and 40% of profits for the funds, respectively, while the fee on managed assets remains unchanged.

Of course, the firm in question—D.E. Shaw & Co.—isn’t fretting over succession plans or underwhelming performance (or both!) like other hedge funds, so….

D.E. Shaw posted double-digit returns across the three vehicles last year and so far in 2022…. The Composite fund, the firm’s largest, makes quantitative and human-driven bets across assets and geographies and rose 20.5% this year through August….

Hedge Fund Giant D.E. Shaw Plans to Raise Fees as High as 40% [Bloomberg]
Almost 70% Of Hedge Funds Have YTD Outflows As The Industry Sheds $146B [Forbes]
Global hedge fund launches plunge, liquidations rise amid turmoil [Reuters]

“At the height of the market, we were managing just over $200 million,” [Raees] Cajee said…. Mr. Cajee said he and Ameer Cajee are in hiding because they have received death threats….

“We dealt with a lot of high-level South Africans, a lot of politicians, a lot of high-level businessmen within South Africa, as well as celebrities,” Raees Cajee said in the interview. “Some particularly very, very dangerous people—that we had not actually known were clients—have started to come out of the cracks.”

And, hey, we have even better news, albeit not for the brothers Cajee. You haven’t lost even that $200 million. By the standards of bitcoin breaches, you’ve lost the equivalent of nothing at all, although in real-world terms it’s still quite substantial.

He added that no more than $5 million is unaccounted for.

And maybe you’ll even see it someday.

Raees Cajee said that he and his brother plan to return to South Africa to attend a July 19 court date tied to the liquidation proceedings for Africrypt.

Obviously, good news like this should reassure the institutions and trigger a rally (in a way bad news never seems to do the opposite), and so it has!

Bitcoin prices rose for the second straight day in part due to news Morgan Stanley bought 28,289 shares of Grayscale Bitcoin Trust through its Europe Opportunity Fund…. Additionally, noted stock picker Cathie Wood's ARK Invest is entering the Bitcoin ETF race….

And, hey, wouldn’t you know that the Fed’s number two has something to say touching on that, although he uses it to draw a conclusion arguably favorable to the cryptoverse.

Citing America’s “susceptibility to boosterism and the fear of missing out,” Mr. Quarles warned that the nation has a habit of falling victim to a “mass suspension of our critical thinking and to occasionally impetuous, deluded crazes or fads.”

This man was appointed by Donald Trump.

He invoked the parachute pants of the 1980s as a parallel to the current currency craze, noting that sometimes fads are just silly…. Mr. Quarles said he does not want to prejudge the process, but he thinks there’s a “high bar” for central bank-issued digital money….

“In my judgment, we do not need to fear stablecoins,” Mr. Quarles said. He argued that the Fed has a history of fostering private sector innovation and “a global U.S. dollar stablecoin network could encourage use of the dollar by making cross-border payments faster and cheaper. And it potentially could be deployed much faster and with fewer downsides” than a central bank version.

Raees Cajee, Blamed by Investors for Billions of Dollars in Crypto Losses, Says Fraction Is Missing [WSJ]
Bitcoin price pierces $35,000, ETF race heats up [Fox Business]
A top Fed official says digital currency may be the money equivalent of parachute pants. [NYT]

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Given the backlog in new SPACs, you might expect the backlog in existing SPACs to ease up a bit, but no: While 94 found merger partners in the first quarter, just 27 had done so since. But things seem to be easing up a bit, and Masa Son—who’s already got 46 billion reasons to be quite pleased—couldn’t be happier for the future, thank you very much.

Better Holdco Inc., which operates a digital platform for mortgages and related services, plans to merge with Aurora Acquisition Corp., a SPAC sponsored by the investment firm Novator Capital, the companies said. The deal, reported Monday by The Wall Street Journal, values Better at roughly $6.9 billion pre-new money, up from $4 billion late last year.

SoftBank Group Corp., which recently invested $500 million in Better as part of a deal making sprint, could put in an additional $1.3 billion through what is known as a PIPE, or private investment in public equity, a common feature of SPAC mergers…. SoftBank’s purchase of shares from existing investors earlier this year valued the company at roughly $6 billion.

Vice Media Group’s plans to go public through a nearly $3 billion merger with a blank-check firm would leave existing investors with control of the company and remove Vice’s onerous financial obligations to private-equity firm TPG….

PlusAI Corp.’s agreement to merge with a special-purpose acquisition company could make the startup the second autonomous driving provider to list on a U.S. exchange…. Plus plans to merge with Hennessy Capital Investment Corp. V in a transaction that would bring the company, which is based in California and China, about $500 million in gross proceeds and a market capitalization of roughly $3.3 billion.

Benson Hill Inc. is going public by merging with a special-purpose acquisition company in a deal that values the plant-growing technology firm at $2 billion…. The St. Louis-based company expects to begin commercial production of its ultrahigh-protein soybean by next year and is developing a yellow-pea protein concentrate. It also has a unit that sells fresh produce to grocery stores and food distributors.

Ginkgo Bioworks Inc., which calls itself an “organism design” company, has agreed to go public in a $17.5 billion merger with a blank-check firm backed by former Hollywood executive Harry Sloan.

The transaction includes a $775 million private placement led by Baillie Gifford, Putnam Investments and Morgan Stanley Investment Management’s Counterpoint Global arm. Cathie Wood’s Ark Investment Management LLC, Bain Capital’s public equity arm, Bill Gates’s Cascade Investment LLC and T. Rowe Price Associates Inc. are also participating in the fundraising, the statement shows.

Mortgage Lender Better to Go Public in SPAC Deal [WSJ]
SoftBank Reports Highest-Ever Annual Profit for a Japanese Company [WSJ]
SoftBank Broke Profit Records. Can It Keep Up the Pace? [DealBook]
Vice Media Targets Valuation of Nearly $3 Billion in Proposed SPAC Deal [WSJ]
Plus’s SPAC Merger Marks Autonomous Trucking Shift to Public Markets [WSJ]
Plant-Tech Firm Benson Hill Going Public in $2 Billion SPAC Merger [WSJ]
Ginkgo Agrees to $17.5 Billion Merger With Harry Sloan SPAC [Bloomberg]