The market has entered the ‘fartcoin’ stage of the cycle, says billionaire investor who’s staying out of crypto

• In his latest letter, David Einhorn questioned the rise of meme coins with no intrinsic value.

• “It’s anyone’s guess as to what will happen next, but it feels like it’s going to be wild,” he said.

• He said his firm was short two leveraged bitcoin ETFs and the trade was a “winner” last quarter.

David Einhorn isn’t sold on the latest bout of crypto mania.

The billionaire founder of Greenlight Capital telegraphed his skepticism in his latest letter to investors, arguing that digital assets were approaching a dangerous level of hype.

“We have reached the ‘Fartcoin’ stage of the market cycle,” Einhorn wrote in his letter on Tuesday. He was referring to the meme coin of the same name, which underwent a meteoric rise and peaked at a $2.5 billion market cap this month.

The token is up by nearly 60% in the year to date. And yet, aside from trading and speculation, fartcoin has no obvious purpose that’s not served elsewhere, Einhorn wrote.

Still, the hype around intrinsically worthless meme coins might just be getting started.

Consider that President Donald Trump announced a $Trump coin late last week, described by its website as solely an “expression of support” and not an investment opportunity.

His wife, Melania, followed with her own token launch. Both coins soared spectacularly before an aggressive sell-off days later. Some investors suffered big losses.

“Nothing stops the launch of many more tradable coins,” Einhorn wrote, adding, “It’s anyone’s guess as to what will happen next, but it feels like it’s going to be wild.”

Einhorn also criticized some of the bullish predictions that have propelled bitcoin to records.

Bitcoin bulls entered 2025 eyeing a host of tailwinds that could send the cryptocurrency to fresh highs by the end of the year. They’re particularly excited about a strategic bitcoin reserve, which would involve the US government buying and holding the token, presumably to protect against inflation and offset rising national debt.

But Einhorn described a bitcoin reserve as a “dubious” use of taxpayer money that’s unlikely to become a reality. Critics are similarly skeptical about financing the effort, with some arguing that the process itself would be inflationary.

“More likely, cooler heads will decide that the government should not borrow another trillion dollars in the bond market to speculate in Bitcoin and that there is, in fact, nothing strategic about doing so,” Einhorn wrote.

He’s also actively betting against some corners of the market. His letter said Greenlight had opened a short position against two levered ETFs tied to bitcoin’s biggest corporate holder, MicroStrategy.

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