Now that we have witnessed the fall of cryptocurrency prices are we about to see a resurgence? We are advised from the newest latecomers, Wall Street transplants, who have “seen the light,” that the recent ‘retail bubble’ (something they call the recent run up in prices) is only an emotional reaction. A temporary trip as part of the longer journey that will see far higher prices (and subsequent crashes) in the next three to nine months and beyond.
And I’m not on about Metronome’s advertisement that it is trying to build a 100-year system. Such bravado is hot air considering the speed of advancing computer technology. Surely, we won’t recognize the Dapps in ten years, much less in ten decades.
But the fact remains, ups and downs lay ahead. Gosh, we didn’t know that.
One guru (Michael Novogratz) implies here that certain cryptocurrencies will attain higher values – at some future point – that will make the recent run-ups pale [my words] by comparison. Currently the entire market capitalization for crypto’s is under three hundred billion dollars but that is enormous considering that last year at this time it was one-third of that. Think back a little farther. Say 2013, April. Then the entire crypto market cap was less than two billion.
If as suggested, the crypto market attains upwards of twelve trillion dollars in capitalization and if bitcoin’s dominance remains around 40% the hint that BTC’s could be valued at over $250,000 each seems acceptable to some. What would this mean for Ethereum (ETH)? $18,000? Ripple (XRP)? $20.00?
And yet, if we check the reviews we’re being advised by Ripple that Bitcoin is now run by the Chinese and maybe that’s not so bad as long as they don’t decide to change the game and they can do that if they are able to process more than 51% of the transactions or if their government decides to order them to do so. Arguably, that would destroy the value of the system but that might be the end game. Is Ripple now pointing out the faults of other crypto-assets as well as coddling up to the regulators and schmoozing the remittance marketers?
The use case debate is in full swing. That each “blockchain” with a good social footprint or one that can solve a problem, reduce costs or secure data efficiently, will rise in value. This seems to be the common sense answer in a crypto-sphere rife with frothy FOMO. In other words, maybe we should bet on the FOMO Coin. (Seriously?) When has this market ever been logical? Maybe the captains of the trade floor are honest. The FOMO machine is alive and well and it has always worked its magic.
So what’s next? What two big bulls could break out of the FOMO bull pen and impale the investor ‘clowns?’
EOS. EOS allegedly has the speed engine and is about ready to take on Ethereum and Ripple. Yet, there are reports of problems after four billion dollars was pumped into the project. Are these growing pains? Novogratz appears upbeat about EOS. Daniel Larimer (of EOS) has had some serious success with Bitshares and Steemit already. We have seen programmers spin-off from Ethereum to help create Ethereum Classic (ETC) and from there to Cardano (ADA). I’m talking about Charles Hoskinson here. He is also a co-founder of Bitshares. Ethereum Classic just jumped in value when Coinbase advised they would be listing it. Will Coinbase list Cardano next? They have not listed Ripple (XRP) and that silence speak volumes.
If you shift gears over to Andreas M. Antonopoulos, for a moment, try to screw your head on straight? you can listen to his not so practical and lightly philosophical defense of decentralized blockchain systems and the consensus mechanism and how governments cannot be trusted to become caretakers of the code, so to speak. In truth, as Antonopoulos advises here, these blockchains (bitcoin) are voluntary and yet the idea that minorities are essentially booted off the network by a super-majority does not seem to bother him. They (the minority) can take their basketball and play elsewhere, he implies. In short, the consensus mechanism to him seems to be a ‘dictatorship by the majority.’ There is no constitutional protection here. No congress. No court. No review. Just a few guys with questionable political backgrounds and loyalties, managing the code you can ‘voluntarily’ use. Is that really ‘digital gold’ or programmed obsolescence?
Does it make a difference if something is centralized, as long as it is trusted? And who does the centralizing? Governments or companies? Programmers or consensus mechanisms? How can we put the cat back in?
Once people make their choice, perhaps as Novogratz suggests, as part of a social mechanism such as Telegram, the FOMO psychology takes over, at least until the retail bubble pops and the dust settles. This innate humanity (FOMO), at least until the regulators step in and allegedly protect those who choose to freely invest, will serve as feeding troughs for the wealthy. But if we know how they profit, we can short the FOMO too.
And that is the other bull in the pen, as I understand it. Telegram (TON).
Finally, we are informed that institutional money is ready to flow in, but custodial issues still concern the big players. Once they figure that part out and one or two step into the fray, trillions of dollars will begin to inflate the largest crypto bubble of all.
What will the repercussions be when the next ‘real’ crypto bubble pops? And for those of us who wish to retain value beyond the reach of governments, how do we balance our crypto-folios in the coming months…and years?
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