I've seen dozens of videos on YouTube talking about a "bubble" in the crypto world, and I hear a lot of opinions but no real facts. So hereby my analysis.
As we all know the cryptocurrencies are still in its early days. With coinmarketcap.com now listing over 730 currencies and 130 assets we all know that there is not enough room for all of them. And yet all the copycat coins are still rising harder than ever without a good reason. More and more people feel like they missed the rise of Bitcoin and so they "invest" in smaller coins leading to currencies that shouldn't have any value at all being worth a fortune. A good example is this is the Maxcoin. Purely made for fun by some students for Max Keiser who is a financial journalist which is also a public figure in the bitcoin world. A coin like this has no real-world use and still its rising without a reason and at the time of writing is worth $9 million. Sure, the profits people make are real but it is a pyramid scheme, simply because people put more money in than there is going out. This is also true for much bigger coins. But I will not elaborate on it because I expect to get a lot of hate for it.
On the other side, we have coins with real potential like Bitcoin and Ethereum. Although bitcoin has some scaling issues, it has the most people trusting it. It’s simply a store of value just like gold. Giving it great alternative for people who don't believe in Fiat money.
Lastly I want to talk about Ethereum, the only cryptocurrency which might be able to get a real value because it focusses on a specific market. Ethereum wants to dominate the contract world by using their smart contracts. This market is immensely big, probably in the trillions but what people don't see is that almost no one is using it yet for its real purpose. It will take years to get such a platform running because it’s incredibly complicated to get real laws translated to computer code. Until then this is just a start up with an immense potential to change the world but also has a chance to fail just like any other startup.
Note: This is not investment advice
well written, thank you ;)
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Ethereum has its own problems, such as clogged networks after an ICO which severely limits usage.
As far as Bitcoin goes, the nature of its rallies tend to lend it to corrections after they're concluded. I don't think we're at one of those junctions now, at least the charts don't seem that way.
The bottom line is that Bitcoin has had general growth and so have other alt-coins. I think this is the crypto-currency golden age, where money is invested in all kinds of coins and there will be many opportunities for wealth creation.
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