Crypto had a flash crash yesterday and there is mass panic everywhere.
Bitcoin is down 22%.
Ethereum is down 7%.
Dogecoin is down 23%.
I am 100% confident crypto will long term collapse, but here’s why this has nothing to do with it.
The simple reason is this.
Bitcoin in 2011 had a bubble where it hit $30 and collapsed to $1.
2013, it grew to $1,000 and later would be at $300.
2017, it grew to $17,000 and dropped to $3,000.
2020/2021, it’s been able to hit $60,000.
Crypto has been around for 10 years and has had a lot of days it goes up and down 20%+.
This isn’t really a point on an eventual collapse, but the thing to look at are the peaks.
If someone bought in the 2011 peak and sold in the 2013 peak, the return would be 3200%.
If someone bought in the 2013 peak and sold in 2017, the return is 1600%.
2017 to 2021 and the return is 252%.
People rallied around Bitcoin in 2021 bragging about trillion dollar market caps and crazy returns.
Problem
- Amazon
- Apple
- Microsoft
These four stocks were ones of dozens of large companies that in the last four years outperformed Bitcoin.
Obvious counter to this would be “Well, that’s the people who bought during the high!”
Issue with that is we can just look at wallets and the expansion of people buying Bitcoin/crypto.
Going to just use numbers from one provider, with blockchain.com.
2013 saw massive growth from 100,000 wallets to it ending with 900,000.
It’d expand to 12 million from 2014 to the end of 2016, but in 2017, it grew from 12 million to 23 million, for the largest growth year yet since 2013.
They hit 40 million by 2020, showing slower growth.
Since the surge, they had rapid growth hitting nearly 80 million users in under 18 months.
This is where the issue is with crypto.
The majority of people only buy during the highs and get hurt in the lows.
My call is this recent fall means very little, but the big issue is going to be the rise.
I believe in the next 5 years, Bitcoin will break $100,000 a coin, but the return over a period of 3 years will be under 100%.
Once that happens and many point out a massive number of stocks to outperform, people will invest hard into other options.
That’s going to be the big issue.
The moment there’s a community of millions burnt and tens of millions bored.
There is nothing wrong with making money on it though. I remain "invested" in a plethora of good coins including steem, but just don't be the one holding the bag when things crash and never go back up.