Greenlight Capital founder: Speculative behavior in the cryptocurrency field has exceeded common sense

David Einhorn, founder of Greenlight Capital, stated in a letter to investors that speculative behavior in the current bull market has surpassed common sense. He wrote, "We have entered the 'Fartcoin' stage." Einhorn pointed out that cryptocurrencies like "Fartcoin" have no apparent practical use other than trading and speculation, and do not meet any other unmet needs. However, this cryptocurrency, originating from internet memes, quickly gained popularity after Donald Trump was elected president, with market sentiment soaring. Now, the market value of "Fartcoin" has approached nearly $2 billion, surpassing many companies listed in the United States. With the popularity of "Fartcoin", more meme coins have emerged. Trump released the meme coin "$TRUMP" based on the Solana platform, which briefly surpassed $14 billion in market value over the weekend. Although $TRUMP fell by over 20% at one point in the past 24 hours, it has since reduced the drop to about 3%. Trump's wife, Melania, also launched her own cryptocurrency. Einhorn jokingly remarked, "Nothing can stop the launch of more tradable currencies. Perhaps we are leaving the 'Fartcoin' stage and entering the 'Trump (and Melania) meme coin' stage. What will happen next is unpredictable, but it feels like a carnival." At the time Einhorn's letter was published, investors were driving up the stock market in anticipation of tax cuts and relaxed regulatory policies under the Trump administration. On Tuesday, the day after Trump took office, the Dow Jones Industrial Average rose over 400 points, while the S&P 500 Index and the Nasdaq Composite Index rose by 0.8% and 0.7% respectively. In the "crazy stage" of the cryptocurrency market, Greenlight Capital profited by shorting some exchange-traded funds (ETFs) indirectly related to Bitcoin. The company specifically focused on two ETFs: T-Rex 2X Long MSTR Daily Target ETF (MSTU.US) and Defiance Daily Target 2X Long MSTR ETF (MSTX.US). These funds use derivatives to attempt to achieve double the daily return of MicroStrategy (MSTR.US). However, due to the high volatility of MicroStrategy and a shortage of derivatives supply, these funds have struggled to meet their expected targets. Greenlight Capital profited in this quarter by shorting these funds, while also engaging in arbitrage trading by holding MicroStrategy stock, resulting in "significant gains."