The bear market in crypto and high-tech shares means a great ‘sorting’ is occurring

In the question of where is real value and what is just froth, I think it is important to focus on the basics, writes Hamish McRae

The bears are growling, and the crypto-bears growling loudest of all (Getty Images)

The bears are growling, and the crypto-bears are growling loudest of all. They have been rampaging across the financial markets, giving US equities the worst start to the year since 2008. And there are probably more declines to come.

Bloombergreports that strategists including Mike Wilson at Morgan Stanley, and Robert Buckland at Citigroup Inc expect stocks to fall further. We will learn more this week, but there is no doubt about the severity of the falls so far – what is most striking is that the newer and more fashionable the asset, the greater the decline.

Take cryptocurrencies. The headlines last week were dominated by the collapse of terra luna, as we reported here. But even the most established of the cryptocurrencies, bitcoin, was trading over the weekend below $30,000 (£24,500), down 37 per cent on the year so far.