… there’s no real difference. If it’s irrational at any point it is fundamentally irrational.
The answer depends on what a market is and what rationality/irrationality are. In trade terms a market is irrational if it departs persistently from its real valuation. If a market is defined solely as the place of exchange then it can be continuously irrational provided there is enough liquidity being moved into it. The rational markets hypothesis presumes that the bill falls due at some point and that temporary flights of fancy and high or low spirits will eventually self-correct. Sociologists understand that fundamentally the market is a technical and cultural structure and therefore there is not necessarily a true valuation to self correct to.
One market might evolve into another type with the same formal attributes but different fundamentals. This appears to be happening with Bitcoin. Cryptocurrencies have gone through several stages and are now entering a new one. The first was the initial technolibertarian stage when Bitcoin was decenteralised, and mainly used by people with an ideological or early adopter interest. At this point it was not worth very much. Its technical overhead was low and bitcoin could be mined inexpensively. The second stage was its first use case when it was adopted by the Silk Road cryptomarket. That gave bitcoin its first reliable influx of new users and cash. It also primed the third stage, the bitcoin gold rush. Investors set up mining rigs to squeeze every last drop from the mining process, driving up the price and making it harder to use at the same time. We are now entering a new monopoly digital asset stage with Microstrategy and then Tesla’s $billion buys of the bitcoin.
This stage is one of insititutionalisation and respectablisation. Institutional investors like Tesla are answerable to shareholders and other stakeholders. There is now an incentive to manage bitcoin as a respectable asset, to clean out miscreants, and to shape financial regulation in a way that benefits these kinds of investors and protects their reputations. This may be the stage when bitcoin takes on its final boss form as a regulated financial asset which underpins the internal economies of major companies. To return to the starting point: we should not look for rationality, in the sense of behaviour abstracted from its context. We should look for reasonability and justifiability in how actors make financial and investment decisions. It is certainly easier to find.