State of the Coin

Where are we headed?

For those of you who are nervous about the current state of bitcoin and the crypto markets: Relax, I’ve been here, I’ve done this. I was here August 2016 when it bounced, January 2017 when it fell for the New Year, July when it plummeted, August when BCash fork scared everyone. The same thing happens every time.

Don’t burn your paper wallets just yet.

So before you burn your private keys let’s set the record straight and give a little perspective.

1. Cryptocurrencies are a news-based asset.

Crypto reacts vividly and wildly to any news, good or bad. Right now there is moderately bad news only. Between the SEC, the “crackdowns”, regulations, and any other recent headline, the outlook for new investors is not good. This is the result of one primary issue and the reason good news won’t be coming into the market for a while.

2. The technology.

Blockchain technology is miles away from an everyday use case. Yes, Coca-Cola is rolling out a new plan for blockchain based supply chain. Yes, Amazon is floating rumors about their own currency and yes, blockchain may soon be used for resumes, but the actual day-to-day use is still a ways off. As a result, there is no ability in the markets to generate good news. In addition, as others have mentioned on Twitter, the ability of many developers to deliver on the production of over 75% of current blockchain products is highly questionable.

3. Forget “the banks” and “Wall St. thugs”.

Crypto is a dangerous investment. Yes, big money is coming, but they aren’t about to pour billions in people’s life savings into a couple tokens. It is a sleeping giant that is just beginning to hear the alarm clock. Few banks have the reserves of coins large enough to "hold down" the price right now and those that do are some of the most scrutinized in the world. Crypto is an adolescent technology with little functionality to currently offer. The only prominent investors who are publicly getting in right now are extremely early investors like Peter Theil.

The biggest titans of the industry like Vanguard, Charles Schwab, Blackrock and Fidelity still hold trillions in consumer assets and they will not be touching cryptocurrencies with a ten-foot pole until it calms down. Crypto has a LONG way to go before it settles. Imagine the backlash if Vanguard dropped $500 billion into cryptocurrencies right now? The markets would erupt, people would be outraged, and if the market made a downturn like this in a few months, Vanguard would never recover its hard-fought reputation for stability for investing in a market with little to no viable working product.

Conclusion

Set down your charts, pour a glass of your favorite beverage and enjoy your weekend. It will all be here on Monday and, in a couple months, you will be laughing and joking about the color of your lambo once again.

“In the midst of chaos, there is also opportunity” — Sun Tzu

Jack Donaghy

If you are feeling generous!

ETH: 0xa27eaa97713d776994cb3969c3ba8f8f5a1ff9d3

Disclosure

The opinions and investment strategies of the author are their own and not to be construed as investment advice. With any type of investment, the potential exists to lose some, all, or more than your investment. The author makes no guarantees of gain or increased profit and cannot be held responsible for losses incurred.

Cross-posted at Medium.com.

Credit to Pexels.com and UnSplash.com for photos.