Crypto and the new pink Jaguar have something in common

This week Jaguar launched a hot pink prototype in Miami and the price of bitcoin passed $100,000 for the first time. It has more than doubled since Donald Trump’s re-election.

So what? Cryptocurrencies are roaring back from near-death. Jaguar is trying to. Both have achieved cut-through in a world of too much everything.

Having been written off by everyone except die-hards two years ago, crypto is now

• embraced by Wall Street;
• enriching investors;
• supporting a wave of “memecoins” that usually sink without trace but can conjure large fortunes from thin air; and
• in the words of Joshua Oliver, “making life easier for criminals”.

The cost of dull. Cryptocoins and memecoins depend on hype and hope to appreciate. Dogecoin – an Elon Musk favourite set up as a joke – has risen even faster in value than bitcoin since the US election, in anticipation of a crypto-friendly presidency.

Their bull run coincides not just with the new Jaguar but also with the sale of a banana at Sotheby’s for $6.2 million (to a crypto multimillionaire). This may not be by chance.

At a time of bland content oversupply “there is a cost to dull”, says Laurence Green, a director at the Institute of Practitioners in Advertising.

“People are chasing excitement, simply because there is so much of everything and most of it is unremarkable. Whether it’s the banana or a meme or a pink Jag, the amount you have to spend to get people’s attention is so, so much less than if you put out something dull.”

The price of excitement. The Jaguar, or something like it, will sell for more than £100,000 – somewhere between one and two bitcoin. That would be easy for Laszlo Hanyecz, a Florida programmer, if he’d kept any of the 10,000 bitcoin he spent on two pizzas in the first recorded bitcoin transaction in 2010. He didn’t, but they would be worth $1 billion now.

At its current price Bitcoin’s market cap is over $2 trillion.

There are at least three factors behind its latest surge:

1. Trump’s conversion. He once called crypto a scam but now says the US needs to lead the world in its adoption.
2. His election campaign, in which crypto enthusiasts invested about $135 million, contributing to ‘1’ above.
3. Most importantly, the decision by the US Securities and Exchange Commission in January this year to allow exchange-traded funds (EFTs) based on cryptocurrencies.

Crypto EFTs submit to precisely the sort of regulation cryptocurrencies were designed to avoid, but they earn fees for banks and give institutional and retail investors exposure to big upswings while mitigating risk.

More than $100 billion has poured into these funds this year.

Irrational exuberance. There is no such institutional backing for memecoins, which are entirely unregulated, based on passing internet fads and can be set up by anyone with a laptop. Between 20,000 and 40,000 are created each year. A tiny proportion catch fire and make real money for those who get in and out fast. As of Wednesday

• BONK, based on a cartoon dog, was worth $3 billion;
• CHILLGUY, boosted by the YouTuber Mr Beast, was worth $466 million; and
• PEPE, based on a cartoon frog, was worth $8.2 billion, which as the FT noted was more than Sainsbury’s market cap.

There is no memecoin based on the pink Jaguar – yet – but there is one based on the $6.2 million banana. Like the original artwork, it’s called Comedian. If that feels appropriate in an age of monetised ephemera, be assured there’s also a memecoin based on Trump, called MAGA.

What’s more… MAGA wasn’t worth much until a $30 million investment in it by Justin Sun, buyer of the original Comedian banana. He has since been placed under investigation by the SEC, and eaten the banana.