I think everybody who is invested into crypto currencies has heard it a lot recently:
- “Crypto is a bubble”
- “Just wait until the bubble pops”
- “Take your money out now”
- “Bitcoin is a bubble”
But here are my 3 personal thoughts why I think that we are not in a bubble at all and why I think that the market will continue increase exponentially:
1. Central banks all over the world will start to create their own digital currencies in the following months and years
Although those digital currencies are of course completely different to Bitcoin, Ethereum, etc. and of course those digital currencies created by central banks are NOT decentralized of course but if every bank on the world will start to use blockchains for their money system they will help every single person out there to understand the concept behind blockchains. More and more people will learn about the technology and so more and more people will also want to learn more about Bitcoin, Ethereum, etc.
They will hopefully learn:
- How to store cryptos
- How to keep private keys save
- How to transfer cryptos
- How to use exchanges
Of course those new created digital currencies from the banks are still
- inflationary
- centralized
- controlled by the banks and states
2. Currently we are building the Crypto Currency Network
The exponential growth in the last few months and years was not because people started to invest into a worthless asset (like in the dot com bubble) it was because we started to build the Crypto Currency Network.
I always like to compare cryptos with social networks like Facebook, Instagramm, etc.
First there are just a few people using and sharing it but if every new user starts to share it with all his friends and his friends share it with those friends, .... there is the exact same exponential growth we are currently seeing in the crypto space.
I am sure if you are reading my post you probably also have already told at leas one other person about crypto currencies and that person may also already spoke about it to his friends.
But if we look at Facebook or Instagram for example people are and probably will still use it in 10 years. There was never a sudden crash were only 10% of all users continued to use it.
3. Investing into cryptos is nowadays much safer as 2 or 3 years ago
It may surprise you but although the prices are much, much higher nowadays than a few years ago the possibility that cryptos crash down 100% is much, much less of course.
Let us compare it to investing into Start-Up companies:
The reason why so few people invest into Start-Up companies is because the risk is much higher than investing into already well known companies.
That is exactly how a lot of whales think because there is one rule in investing "Never lose money" (Waren Buffet)
One important thing though:
Only invest into coins which have a real value and a real use case.
Probably 90% of all coins have no use case and are only bought up because of the hype and the marketing behind it.
Only invest what you are willing to lose.
So as always please do your own research and I am not a financial adviser and this was not financial advise.
Have a great day!
Cheers!
Great articles. Short and inspiring! I am also wondering if central banks created their own blockchain based coin, then how is that coin inflationable?
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the mind boggles...
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Thanks a lot for your kind words! It was my first post so I am really glad you liked it. :)
Well I think that if banks create their on digital currency like Russia and Dubai already did it is still controlled by the bank and the state.
So they only need to press one button and all of a sudden they have created X amount of their digital currency. Some people also think that USD Tether works like that although they claim that every single USDT is covered by a USD in their account.
That is why I am very careful with USDT and every centralized crypto out there.
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Hey @sugarboy; agree with 2/ , 1/ well, let's see. On 3/ - yes, the possibility of a 100% crash is pretty low. But price volatility hasn't really dropped. It looked like it had, then the last couple of weeks happened.
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Thanks for your kind reply!
I totally agree with your point that the volatility has not dropped and it may never drop but I do not think that we see a crash down more than 50%.
In my opinion the price will always move in waves and we may see a drop of 20 or even 30% but I do not really think that we will see a "bubble crash" where the price drops 50%+ and if so I still think that the long term view of cryptos especially Bitcoin is 🚀
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