Are we at or near the precipice of another monumental collapse of the crypto market?
This is the question many have begun to wonder as Bitcoin's price has sputtered around $50,000 this week, and the analysts and talking heads are reminding HODLers and traders the age old saying - "Invest an amount you are prepared to lose 100% of!".
While this is technically true, as an avid consumer of all news crypto, reading between the lines of expert's analysis leads me to believe this incredible run is far from over.
Hell, the CEO of Kraken just publicly stated BTC is going to "infinity". This is obvious hyperbole.... or is it? Maybe someone should do a wellness check on good old Jesse Powell. Just kidding.
He, like many of the industry's pioneers, are smarter than you think and crafty about what they broadcast to the public. What I think Jesse was implying, is that Bitcoin's potential, as currency and a store of value in the abstract sense, is infinite in the future landscape of personal and institutional finance.
You can't dispute the fact that the basic ideas behind cryptocurrency itself is an engine of innovation.
Ok, the Jesse Powell example might have been a little extreme. However, you don't have to look very far to find what the more straight forward articulate crypto thought leaders and news outlets are predicting. The BTC stock-to-flow model has become increasingly in vogue as of late, as the most effective price prediction model used by BTC investors and analysts.
The more realistic stances of some of crypto's leading experts tend to believe BTC could rise to somewhere in the range of $75,000 to $150,000 by 2022/23.
As expected, shitcoins have really been battered by the volatility of Bitcoin and it's nearly 60% market dominance. Now, I'm not throwing shade at the altcoin market (I own 0 Bitcoin as a matter of fact), for the frustration for us ETH, ADA, and DOT hodlers can be excruciating having to be pushed around by much less efficient "big brother".
Also, for all you BTC truthers, you have an equally valid perspective on these continuing conversations. In fact, one of the reasons why we believe the current bull run is here to stay is BTC's whopping $1T market-cap that was recently surpassed.
Still nervous about a possible repeat of the 2018 crash?
The differences outweigh the similarities at this point between 2018 and 2020/21's crypto runs. The ecosystem back in 2018 was not nearly as robust with layer 2 applications and institutional investment (see DeFi, Dapps, NFT's, Greyscale, Elon, etc.).
There now exists genuine threats and competition to Ethereum's dominance as a Layer 1 for developers and altcoins. With Eth gas prices surging to all-time-highs, Cosmos, Cardano and Polkadot continue to eat away at Eth's foothold on the altcoin market, as more and more people seek cheaper alternatives and higher ROI. Plus the interoperability of the Cosmos and Polkachains have real paradigm shattering potential.
Bitcoin was the backbone and foundation of the explosive growth of crypto in 2017-18 and was hence burdened with a load too immense to sustain. While still obviously the most important piece to mainstream crypto adoption, BTC is not under the same amount of pressure to perform and pick of the slack of altcoins.
The vibrant communities of altcoins that currently exist with market-cap's in the billions of dollars has skyrocketed. Granted the current gains of the crypto market this year were totally unexpected, but regardless proves the viability of crypto as a real threat to fiat and most importantly the dollar.
This is not merely to say there's 0% chance the market crashes again, and the recent mainstream stock market crash of 2008 coupled with crypto's equivalent in 2018 proves that anything is possible. You should be ready for anything.
To me, there's only one real opposing threat to crypto's survival, and that is ourselves. Well, actually the government to be more specific.
Janet Yellen's unchecked rants about the dangers of black market dealings and upticks in crime through the usage of BTC money laundering schemes have been a complete disaster for the crypto market stability. Coincidentally, these below-the-belt shots always seem perfectly timed with whatever bad news about the Fed and the trillions of stimulus money being frantically injected into the economy (much of it straight into their cronies pockets) resulting in massive inflation of the dollar.
While President Trump's somewhat indifferent attitude towards BTC didn't do crypto any favors, it's a miracle it not only survived from thrived throughout 2020. After closer inspection it makes sense as a pure hedge on the dollar.
There was already an uneasy relationship between the government and the crypto market to begin with, and President Biden's newest elected cabinet members are doing us no favors. Every time Mrs. Yellen rips BTC for whatever backhanded reason, the trust and stability of the crypto market get's slowly chipped away piece by piece.
This is why we HAVE to continue to do a better job of educating our friends, family, and the public at large about cryptocurrency. For seasoned cryptonuts like us, the potential of projects and applications being developed is plain as day. If we can effectively explain to the public that Janet's qualms with BTC and crypto account for a number below 1% of all crypto transactions ever recorded, then nothing will bring down this incredibly exhilarating ride we've been on.
Don't we all want to take it for one more spin around the block before this is all said and done? Or 2? Or...