The crypto adjustment shows that the boring is back

When Coinbase was noted for the first time in the public stock markets last year, this was quite a moment for the crypto tour itself and for the industry of digital assets in the broader sense - the moment when the crypto was included in the establish.

Regardless of the company's own official documents, that it depends on a small number of customers, or that it is said that employees "generally do not comply with the same compliance sustainability and rules as financial services companies". It was practically a case of "hold the flap and take my money". The listing brought Coinbase a market capitalization of $ 65 billion, which at the time corresponds to the value of Intercontinental Exchange, the owner of the New York Stock Exchange itself.

The share was a dud right from the start. Investors who climbed on the first day were already 25 percent in the minus at the beginning of this year. But after a really dark week, which was characterized by dreary results in the first quarter and a disclosure error that forced the CEO Brian Armstrong to apologize and deny that the company would go bankrupt, the shares have now fallen by 80 percent compared to their opening course at the debut.

The "Hold the flap and take my money" approach is dead, destroyed by the decision of the US Federal Reserve, to withdraw the bowl and increase the interest rates. The new, more sophisticated mantra is "Cool story, brother. Provide it." This is a topic that runs through all financial markets. Stories without a substance no longer sell.

This may be shown most clearly in the crypto-asset market, which depends on the coin base. Bitcoin, Ethereum and a small group of other coins attract the most attention in this area, together with joke coins, which are usually named after the pets of Elon Musk. (Not really.)

The largest of these token buyers have been attracting for years, generally small investors, but also one or the other libertarian billionaire and some hedge funds and accumulation of private assets.

The stories behind these purchases were diverse. Some true believers say that crypto is a new global currency. Give him time, they say. Well, it now has time, actually more than a decade, and I still can't use it to buy a white Americano or other everyday things. Others have claimed that Bitcoin's hard limitation of the number of coins in circulation makes it a protection against inflation. Well, once again, inflation is at a 40-year high in the United States, and crypto has still fallen in price. This is a purely speculative asset, and that's okay as long as speculation is fashionable. It is no longer.

The perhaps the largest storyteller in crypto are operators of so -called stable coins, which are said to be linked one to one to the dollar. In general, this happens through the accumulation of reserves that correspond to the value of the tokens in circulation. However, details were missing about what these reserves consist of, in particular from Tether, the largest player in this area. We asked Tether this week about a few details how to deal with US state bonds worth several $ ten billion. It refused to go into more detail and said that information is his "secret sauce". Tether's $ 1 bond has already suffered a difficult blow in the past few days. This type of manual waving will probably not convince the doubters.

But the new, more cynical and researching tone at the markets is not limited to the Wild West of cryptography. Shares in the futuristic technology sector were also particularly hard hit. "It looks like disruptive cash-burner shares are running the market down," said Charles Cara from Absolute Strategy Research.

The new mood among investors means that companies are confronted with greater urgency to override large plans for disruption to old-fashioned cash generation.

"The shares that do not do this are no value, while those who do this will have lower growth (albeit more profits), which speaks for lower ratings," he said. "In any case, this does not indicate a long -term recovery of these highly valued stocks."

The game has changed very simply, led by the increase in the returns of US state bonds-the downside of a drop in prices, since inflation remains hard and the central banks raise the key interest rates.

"In the case of higher interest rates, investors are less to finance companies with a negative cash flow," said David Older, head of share at Carmignac. The return on 10-year-old US state bonds, which has increased from 1.5 percent at the end of last year to 2.9 percent, is the key index that he is observing here, he says.

"How much of the expansion of the multiples was sustainable and valid, and how much was due to low interest rates and the trade in stocks at home? There is a lot of pain on the market," he added.

preferred aspiring stocks of the lockdown era, especially companies that have not recognized that they ride on a short-term wave, no longer work. Instead, Older is looking for opportunities in sectors such as cyber security and software - companies that can refer to real and steady cash flows.

It can be less exciting than getting into a disruptive stock or choosing the next Amazon. But there are reasons why the oil company Saudi Aramco Apple put in the shade this week as the most valuable company in the world. While high energy prices drive the share price, it also sells boring.

katie.martin@ft.com