Are Music Rights, Bitcoin Or Tesla A “Bubble”?
The prices being paid for music catalogs of late are through the roof. Recent acquisitions of song rights from the likes of Bob Dylan, Neil Young, Lindsey Buckingham, and Jimmy Iovine have all reaped eight to nine-figure pay days for these established artists (I think we can agree that Jimmy’s production contributions on albums from John Lennon, Bruce Springsteen, Tom Petty, U2, etc., can be considered a form of “art”).
At the same time, the Big Daddy of cryptocurrencies, Bitcoin, has risen from a couple of years of relatively flat valuations in the $3,000 — $5000 range, to top $40,000 in a matter of weeks.
Tesla has also been on a tear recently — not only because it defied the naysayers and delivered 500,000 cars to customers in 2020, but also because its stock (which has its share of detractors, including Michael Burry, deftly-played by Christian Bale in 2015’s “The Big Short”), has skyrocketed 513% since May 1 of 2020.
Is there a correlation here? Can these three assets actually be compared? And, perhaps more importantly, do they constitute “bubbles”?
Business research firm, Gartner, defines a financial bubble as, “…an economic cycle characterized by rapidly increasing prices of an asset to a point that is unsustainable, causing the asset to burst or contract in value.” They go on to…
