As I write this, cryptocurrencies are in general freefall (though they have recovered somewhat), as China has recently announced that they are banning banking transactions and processing of cryptocurrency transactions, and Iran is also looking to crack down on mining. Cryptocurrencies have been volatile lately, as “memecoins” have had their day, and recently Elon Musk announced that Tesla would no longer accept Bitcoin for car purchases due to the negative impact that the fossil fuels it took to mine Bitcoin would have on the environment.
First of all, I believe in blockchain technology, which token and coin cryptocurrencies support – a place for transactions to take place without fear of change or hacking, a place where decentralized apps (dApps) and decentralized finance (DeFi) can take place freely, and cause an exchange of value for people and businesses, be it games, social media, or business or data transactions. These blockchain landscapes are controlled and value exchanged by coins and tokens, which trade like stocks. However, recently there has been a true disconnect between the value of many of these coins and tokens and their purpose, future, and viability. Many people buy them on crypto trading markets without even knowing, or caring, what these may one day do. It’s just another trading vehicle to them.
So, what’s next for crypto? I have no idea. However, I do have a couple of thoughts, and they mostly come from the internet stock bubble and crash of the late 1990s and 2000. Back then, internet stocks were the rage. Anything attached to the internet could get a multi-billion dollar valuation almost immediately.
Then, like all bubbles do, it burst. The crash of 2000 threw the baby out with the bathwater. However, the end of the internet stock bubble did not portend the end of the internet. We live in a more connected society than perhaps we even thought we have back then.
The fly-by-night internet businesses – the eToys, the Financial Webs, etc. – all went away. However, the businesses that had a solid business model – the Pricelines, the Amazons, the eBays – all stayed, regained their valuations, and went on to new highs, and in many cases went on to change our daily lives.
My point – I predict two things about the crypto market: (1) that there will one day be real, functional, stable store-of-value cryptocurrency (or cryptocurrencies), like digital gold; and (2) the viable application coins and tokens that support real business and valuable dApp and DeFi functions on blockchain technology with continue on. I don’t foresee anything where “memecoins” which can be produced by the trillions, or tokens with a white paper written that is a copy/paste from other white papers, can have sustainable value.
So, given my predictions, when do I think this will take place, and how long? Again, I have no idea. But the future will be interesting…
DECADES to Wealth 