By CCN: Beyond Meat (BYND) is Wall Street’s newest darling. After its stock rallied 168% in the best IPO in a decade, the vegan burger maker continues to impress while the rest of the Nasdaq suffers heavy losses. There is an unfortunate truth beneath all of this hype, and to explain it we need to look no further than the Bitcoin bubble.
Deja Vu: Beyond Meat Feels Uncomfortably Like Bitcoin in 2017
When cryptocurrency exploded into the public consciousness in 2017, led by meteoric gains in Bitcoin, everyone wanted to talk about blockchain. The groundbreaking technology that underlies many digital coins was so new that there was almost no way to play it outside of investing directly in cryptocurrency assets.
Beyond Meat is in precisely the same situation, except in the world of vegan meat. A rapid increase in valuation often creates an extremely “bubbly” situation. Longer term, bubbles are fantastic for disruptive industries. The attention they bring loads the fledgling technology with an abundance of capital to make the developments they need.
For nervous investors, however, bubbles can be a disaster.
Beyond Meat Copycats Could Leech Market Share – For Now
Beyond Meat loses money and still has a long way to go before their meatless burger entirely displaces the beef establishment. A bubble is the only way to get enough money into their hands to stand a chance.
If Bitcoin had not rallied to $20,000, there is no question that Crypto Winter would have been a lot longer and a lot harsher than it has been.