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State of Crypto

Everybody wishes that they bought companies like Amazon way back when they first went public, and then held them until today. If you did that, you would of course now be rich. But what would you have had to deal with along the way?

Well, for one, you would have had to stomach an 80% decline in its share price when the dot-com bubble burst. And so while hindsight is always 20-20, do you really think that, faced with this cliff, you would have held on, not freaked out, and not sold? Yeah, who knows.

Moving to today and the crypto space, the price of Ether is down 51% over the last 6 months. That’s not quite 80%, but 51% is still a big number, especially if you dumped all of your savings into it and/or borrowed money to do so.

But does this decline really mean that crypto is rat poison?

Last year when the market cap of crypto was rising, I believed that crypto had the potential to become the next big thing for the internet. And I still believe that today, which is why I continue to dollar cost average and why I continue to collect NFTs that I like.

I may be wrong with the conviction I have (and this post will serve as permanent evidence of it), but it’s what I believe. And my conviction doesn’t depend on today’s price. It depends on what I think it could happen with crypto in the next 10 years.

So with that, here is an interesting “State of Crypto” report that venture firm a16z just published. I think the key message here is that this is a longtime coming. And while it is still early days, momentum continues to grow. But of course, you should decide for yourself what you believe.

5 Comments

  1. AM

    I’m with you. While I haven’t been in crypto that long, I’m in it for the long haul and the precipitous drop, while nerve-racking, is temporary. I’m a bitcoin maxi (because all the other coins aren’t protected against minting-generated inflation and therefore are basically digital fiats), and I think we’re only seeing the beginning of what it can do. I believe it will be as transformative to humans as the printing press was and we’re already seeing how freeing it has been in places where there are no other alternatives for people to take control of their finances.

    For these reasons I’m still bullish and taking advantage of the dip to buy more and HODL.

    Liked by 1 person

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