Article contributed by Isaiah McCall.
Follow him on Medium here.
When I worked as a fintech writer in Baltimore my friend and I gushed about crypto’s approaching impact in 2022.
We looked forward to:
- Ethereum 2.0
- The first Spot Bitcoin ETF on the horizon
- Favorable government regulations
I never imagined we’d be here — the darkest period in crypto in a long time.
Everyone sounds like they’ve been psychologically tortured out of the market. I hear it in the tone of crypto influencers. I hear it from my friend in Baltimore. It feels like something is happening. Something bad.
What’s more interesting to me is how investors can be in this market for years and still be fooled like this.
Bitcoin is dead. Ethereum is dead. Altcoins are dead. We’ve all heard this before. What you should be reminding yourself is that cryptocurrency is shaping up to be the best financial opportunity this decade.
If you pay attention, there’s money to be made in this “bear” market.
The Real World has No Use for Bitcoin
Everyone hates Bitcoin right now.
Sentiment towards Bitcoin is extremely negative not only in the mainstream but within larger crypto communities as well.
In fact, the crypto “Fear and Greed Index,” a popular indicator that captures the mood of investors slipped into “extreme fear” range last week.
The timeless Warren Buffett quote comes to mind: “Be fearful when others are greedy and greedy when others are fearful.”
Every expert in finance thinks it’s over (again) for Bitcoin. And let me just say, yes, I understand why this time everything feels different.
Last November we saw mass cryptocurrency euphoria followed by mass fear, followed by even the most hardcore Bitcoin maximalists selling off.
It was a whiplash effect like someone open palm slapping you across the face and then giving you a kiss afterward. It left the markets crabbing as we see them now. This is where I say to you, $30k — $40k is proving to be the absolute bottom for Bitcoin, and in a few years’ time we will be looking at $30k to $40k as we once looked at $3k to $4k.
The events of the last few months have shown why:
- Remittance Markets: The remittance markets, otherwise known as the way we send money from one country to another (like we did for Ukraine), have proven that Bitcoin is the best system for this. If Bitcoin could capture even a fraction of this market, as it continues to do so, it could add upwards of $300b to its market cap.
- The World’s Most Efficient Value Settlement Network: The global settlement network is where banks send money to each other digitally — but eventually settle in a final currency (often the US dollar). However, Bitcoin is slowly eating away at this market settling more than $60 trillion in transfer volume to date. If Bitcoin could just take 25% of the settlement network’s total market share it would add $3.8T to its market cap.
- Bitcoin is Still Gold 2.0: Bitcoin remains a finite asset backed by golden mathematics (21m will ever be produced) in a world where inflation is at record highs. This is all to say that if Bitcoin can capture 50% of Gold’s total market cap — with gold being the perfect hedge against inflation — another $5.5 T will be added to its market cap.
A $10 trillion total crypto market cap gives an individual BTC price of around $330,000
The fundamentals underlying the intrinsic value of Bitcoins haven’t changed. In fact, they continue to improve day by day based on the data.
Investment fear and fatigue are only rampant because we’ve been in a financial crab market for the past 6 months. Assets aren’t going up or down drastically — we are just moving side to side.
Crab markets make you feel empty and bored. Don’t fall for it.
Cryptocurrency Isn’t a Tech Stock
The cryptocurrency markets are currently tied to tech and the NASDAQ — both of which are getting hammered due to the Fed tightening its monetary policy.
This means for crypto to resume a bull run it needs to decouple from the rest of the market.
That shouldn’t be too difficult as crypto is not a tech stock and never will be.
Crypto’s treatment as such is only a recent phenomenon — and all it takes is a catalyzing event in the crypto markets to separate the two.
For Ethereum this will be the Eth2.0 upgrade coming later this year.
As for Bitcoin, the next “halving event” — a moment when less Bitcoin is given out to miners; already 90% of Bitcoin is on the markets — is two years away. Bitcoin might have to ride the coattails of other cryptocurrency announcements in the meantime.
The Collapse is Near
I’ve been hearing that since 2013.
This time it might be for real.
Inflation is out of control, the supply chain is fucked, and more recently our president said “Food shortages are going to be real.” Not to mention that stocks and crypto are down five months into the year and will probably keep going down as the Fed raises interest rates.
Shit is starting to get spooky. All that said, I predict the forthcoming recession — which Forbes said is guaranteed — won’t be as bad as the banks and gold bugs are predicting, but we will still have a hard landing.
Invest in fundamentals — that’s my advice to you.
Whether you’re investing in the stock market, precious metals, or cryptocurrency, this is not the time to get cute and bet it all on Shiba Inu. In a crab market, and eventually a bear market, everything bleeds, especially this:
The projects that aren’t based on fundamentals are dumped first. So when it comes to cryptocurrency here are the two I’ll always hold:
- Bitcoin: Bitcoin continues to serve as an excellent store of value. Because Bitcoin is decentralized (meaning nobody owns the system) and its blockchain is immutable (meaning it can be audited by anybody) BTC will hold value. As modern philosopher Naval Ravikant says of Bitcoin: “Think of Bitcoin as a bank account in the cloud, and it’s completely decentralized: not the Swiss government, not the American government controls it.”
- Ethereum: In its most basic sense, Ethereum is a massive upgrade to the internet. Where Bitcoin removes the central power in the financial system, Ethereum removes the centralized control in any mobile or computer application that has or will ever exist. As censorship continues to be at the forefront of conversation, Ethereum will play a key role in society.
There is No Next Bitcoin
When I worked for that fintech company in Baltimore we had one rule: “There is no next Bitcoin.”
The genesis of Bitcoin can never be replicated in crypto again. If Bitcoin fails the very fundamentals of cryptocurrency fail — which, at this point, is impossible.
Bitcoin, more specifically blockchain, is less of an invention and more of a discovery. The genie is out of the bottle. It got out in 2009 and it’s not going back in. This is evident with 81 of the top 100 companies in the world
moving into blockchain technology.
In light of all the economic uncertainty and undisciplined monetary policy, Bitcoin and Ethereum remain two assets I feel most safe in.
Back to crabbing.
Ever since I was a child it was my dream to become a financial advisor. Unfortunately, it never came true. Therefore I am not a financial advisor and you should do your own research and not just listen to random people on the internet. Nothing contained in this publication should be construed as investment advice.
This article contains excerpts from my new book “Gold 2.0,” join 2000+ people on my Substack for a limited copy of the eBook version!
Article contributed by Isaiah McCall.
Follow him on Medium here.