It was another day of euphoria for Bitcoin boosters and the options-slinger set as virtually all their favorite things launched skyward.

Just a day after violence rattled the US Capitol and sent shockwaves through the nation, market exuberance showed no signs of slowing down. Stocks rallied with about 70% of the companies in the S&P 500 gaining, while Bitcoin cracked a record high above US$40,000 and options activity soared.

Speculative mania is snowballing as assets rise in almost perfect proportion to their embedded risk. That is a fact that concerns Wall Street’s more sober-minded observers, who say that while owning fringe assets always looks like genius in a rising market, recklessness gets exposed when the tide turns.

See: JPMorgan says Bitcoin could surge to US$146,000 in long term

“When you’re buying these high-flying stocks after such a huge run-up, investors risk getting caught on the wrong side of that trade,” said Candice Bangsund, a portfolio manager at Fiera Capital Corp. “Things could start to unravel pretty quickly.”

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The poster child for market exuberance — Bitcoin — has doubled in value in less than a month, with its advance swelling the total market value of cryptocurrencies beyond US$1 trillion. 

Amid the flood of demand, Coinbase Inc., the largest US digital-asset exchange, experienced “connectivity issues” on its website and mobile app for a second day.

Meanwhile, day trader favorite Tesla Inc. rose for a 10th straight session, matching its longest ever winning streak as the electric-vehicle maker powered to record highs.

Adjacent companies caught a serious bid as well, with equipment maker Ayro Inc. up 13% and Nio Inc. rising 7.5%. Blink Charging Co. gained 6.8%, extending its advance since the end of October to 470%.

“The markets really are very exuberant and what I think they’re reacting to is, they look forward, everybody knows that, and I think they’re expecting super-stimulus,” said Kim Forrest, chief investment officer of Bokeh Capital Partners. “When people are putting money to work, well it gets to work and it bids prices up.”

In the options market — a favorite of speculators gunning for big gains — more than 46 million contracts traded Wednesday across US exchanges, the sixth-most active day in history. The other five all occurred in 2020, data compiled by Bloomberg show. Even amid political unrest, most bets placed by traders were bullish, with almost 30 million call contracts changing hands, the fourth-most on record.

A Tesla call with an US$800 strike price expiring on Friday was Thursday’s second-most traded contract. Meanwhile, roughly 307,000 bullish options on U.S. fuel cell maker Plug Power Inc. changed hands as shares surged, almost triple the 20-day average.

See also: Bitcoin's biggest fans are hedge fund baby boomers

The fever is evident in even the most unlikely places. In a note to clients Wednesday, Julian Emanuel, BTIG LLC chief equity and derivatives strategist, recounted observing a heated discussion between a cashier at a gas station and a fast-food worker on the merits of owning short-dated call options on growth stocks like electric vehicle and genomics names. After joining the discussion, he found out that neither of them had traded stocks or knew what an option was before June.

“Not only are the public’s animal spirits alive and well, but their investing flexibility would seem ready for the next test,” he wrote.