Most people don’t think about the Federal Reserve very often, and only a select few contemplate the effects that the U.S. central bank has on investors. But over the past few years, that’s begun to change. Many economists and keen market watchers are making the case that years of loose monetary policies from the Fed and other central banks following the Great Financial Crisis (GFC) helped create an “everything bubble”—and now it’s popping.
The everything bubble idea isn’t new. For years before 2022’s stock market woes, leading minds on Wall Street including the investing legend Jeremy Grantham warned about a brewing “superbubble.” The idea is that near-zero interest rates and quantitative easing (QE)—a policy where the Fed would buy mortgage-backed securities and government bonds to boost lending and investment in the economy—pushed investors toward riskier investments, allowed unsustainable business models to thrive on cheap debt, and helped fuel the Pandemic Housing Boom.
It’s early days, but in retrospect a lot of outlandish financial predictions accompanied this era of easy money. And the fallout for Americans hasn’t been pretty, as inflation continues to rage and recession fears mount. But there is a silver lining for the finance community. The everything bubble provided some of the most ridiculous—and hilarious—forecasts in history.
From cryptocurrency experts and hedge fund managers to economists and investment banks, the easy money era was filled with bulls who believed the good times would never end. Here’s a look at some of their strangest calls.
The cryptocurrency boom of 2020 and 2021 was unprecedented. Between January 2020 and the peak of the crypto fervor in November 2021, the industry’s total value grew to over $3 trillion and Bitcoin prices soared roughly 800%.
The crypto faithful were sure that the party was just beginning. Billionaire venture capitalist Tim Draper said in June 2021 that Bitcoin would hit $250,000 by the end of 2022. “I think I’m going to be right on this one,” he assured CNBC’s Jade Scipioni.
Bitcoin ended up finishing 2022 just above $16,500, but just last month, Draper repeated his call for Bitcoin to hit $250,000—this time he said it would be by the middle of 2023.
“I expect a flight to quality and decentralized crypto like bitcoin, and for some of the weaker coins to become relics,” Draper told CNBC.
Tim Draper did not respond to Fortune’s request for comment.
Draper wasn’t the only leading figure to jump on the Bitcoin train during the easy money era and make lofty forecasts either. ARK Invest’s Cathie Wood was the first public asset manager to gain exposure to Bitcoin via the Bitcoin Investment Trust (GBTC) as a part of her tech-focused exchange-traded ETFs in 2015.
The bet led Wood to face serious criticism from her peers, but barring a brief crypto winter in 2018, it paid off as Bitcoin’s price soared to over $65,000 by November 2021.
Wood was sure that the good times would last throughout the bull market. In November 2020, she told Barron’s that institutional adoption of crypto would drive Bitcoin’s price to $500,000 by 2026 and repeatedly “bought the dip” whenever Bitcoin prices fell. Wood even told The Globe and Mail in a February 2020 interview that Bitcoin was “one of the largest positions” in her retirement account.
The ARK Invest CEO remained bullish even at the start of 2022, when Bitcoin prices had fallen from their highs of over $65,000 to just under $50,000. She argued that the leading cryptocurrency would touch $1 million by 2030 in ARK’s “Big Ideas 2022” annual research report.
Since then Bitcoin’s price has dropped more than 60%, but Wood and her team aren’t fazed, and still believe that their prediction is fair.
“We think Bitcoin is coming out of this smelling like a rose,” Wood told Bloomberg in December, arguing that institutions will eventually buy into Bitcoin after it is “battle tested” by the crypto winter.
Cathie Wood did not respond to Fortune’s request for comment.
Tom Lee, head of research at Fundstrat Global Advisors, who previously served as chief equity strategist at JPMorgan and spent over 25 years on Wall Street, has also been a perennial Bitcoin bull. In early 2022, he predicted that Bitcoin would hit $200,000 in the coming years.
And despite the recent fall, which he admitted has been “horrific” for investors, Lee told CNBC in November that he still believes Bitcoin will come out of the current downtrend and hit his target. But while many crypto forecasters are sticking by their lofty estimates, Wall Street has been walking back some of theirs.
Tom Lee did not respond to Fortune’s request for comment.
Investment banks made some pretty dramatic forecasts during the cheap money era. After the stock market soared throughout the pandemic, returning 28% to investors, Wall Street was confident that things would slow down in 2022, but not to the extent that they actually did.
Investment banks expected the S&P 500 to end 2022 at 4,825, representing only a mild 1% gain for the year. Instead, the blue-chip index dropped roughly 20%.
The (perhaps unwarranted) bullishness among investment banks was particularly clear when looking at the price targets for growth stocks that benefited from pandemic trends. The online used car retailer Carvana, for example, soared throughout the pandemic as used car prices rose to record highs.
The firm was able to take advantage of consumers’ inability or unwillingness to shop for vehicles in person during COVID, leading some analysts to give incredibly bullish forecasts.
In January 2022, Morgan Stanley’s auto analyst Adam Jonas called Carvana the “apex predator in auto retail” and assigned a $430 12-month price target to the stock. Since then, shares of the online car retailer have plummeted more than 97% to just $4.48—and some analysts believe more pain lay ahead for investors.
Morgan Stanley did not respond to Fortune’s request for comment.
New Construct’s CEO David Trainer warned investors in June that Carvana was burning cash at an unsustainable rate and may not survive.
“Time is running out for cash-burning companies kept afloat with easy access to capital,” Trainer told Fortune. “These ‘zombie’ companies are at risk of going bankrupt.”
Coinbase is another example of the fervor that developed on Wall Street over the past few years. When the cryptocurrency exchange went public in April 2021, shares spiked from their $250 reference price to $381 per share.
CNBC’s Jim Cramer, a former hedge fund manager, took to Twitter after the IPO, saying that he “liked Coinbase to $475.” And he wasn’t alone, investment banks’ average price target for the exchange was over $400 per share in early 2021.
Since then, however, Coinbase stock is down more than 90% amid the crypto winter. And Cramer has changed his mind, saying in a December 13 tweet that he was “not a buyer of Coinbase here,” calling it “too early.”
CNBC did not respond to Fortune’s request for comment.
The cheap money era may have led many forecasters to assume that asset prices would continue to soar, regardless of valuations, but this year has proven to be a wake-up call. Wall Street analysts have slashed their price targets for many of the stock market’s pandemic darlings. It’s a new era for markets and forecasters, as Tim Pagliara, chief investment officer of the investment advisory firm CapWealth, told Fortune last month.
“We’re going to be unwinding a lot of the speculation,” he said. “There’s going to be a lot of revaluation of everything from commercial real estate to how the investing public looks at things like crypto.
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