The crypto revolution is still in its infancy. Great fortunes are yet to be made. And lost.
The cryptocurrency currency market may at times seem large to those who trade or invest in it but compared to other markets, it's minuscule. As of today, all cryptos combined have a market capitalization of $137 billion, chump change on Wall Street. Dozens of publicly traded companies individually have a larger market cap than that. And in terms of market volume, cryptocurrency trading during a 24-hour period has recently been $5 billion or so, a drop in the bucket compared to foreign exchange trading which is a thousand times larger, trading $5 trillion a day.
During the next financial meltdown, which may make 2008 look like a picnic, scared money will flee to other asset classes. Precious metals would seem to be obvious, but I'd argue that crypto will also benefit, and in a big way given its tiny market capitalization.
I've lost track of how many cryptocurrencies are out there. It was at least 700 the last time I looked, probably over a thousand by now. Bitcoin is of course the 800 pound gorilla. And, strange as it may seem to say it, could at this point almost be considered as a conservative investment, at least relative to other cryptocurrencies. I'm not a Bitcoin maximalist like Tone Vays is. Yes, many altcoins are scams. Yes, Charles Ponzi and tulip bulb mania come to mind. Yes, many altcoins will revert to a value of zero. But I think that a few of them may do remarkably well in the years to come. A decade or so from now, it might turn out that Altcoin X beat all the others, and that those who bought it way back in 2017 garnered a 58,425% return on their investments. Unfortunately, none of us can know today what that particular crypto is.
Let's narrow the comparison down to two, Bitcoin and Steem. Which has the greatest potential? Let's be honest, it's an unanswerable question. But let's take current values, ponder some possible variables and scenarios, and take some leaps of faith. And let's think about it as investors rather than as traders or speculators. With at least a three-year horizon, maybe even a decade.
As of a few minutes ago, Bitcoin was trading at USD $3,830 and Steem was $1.20 according to coinmarketcap.com
Ask yourself, which is likely to happen first, Bitcoin at $32,000 or Steem at $10?
The percentage changes are just about the same, so think hard before you answer.
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Okay, so I don't have an answer either. But in both cases, it's less than a tenfold increase.
About a year ago, when Bitcoin was at something like $700 or $800, Vinny Lingham predicted that it would hit $3,000 some time in 2017. He was scoffed at.
A year later, been there, done that.
What Could Possibly Go Wrong?
The U.S. government could play hardball with crypto.
Outlaw it, declare it to be terrorism-related,
seize Coinbase, all of the above.
Yes, people would find workarounds, hide private keys and such.
But it would be bad for crypto, really bad.
Bitcoin has been declared dead about 117 times.
Potentially, the 118th obituary could be correct.
Steemit could drop the ball and be overtaken be overtaken by a rival.
After all, MySpace used to dominate social media.
What Could Possibly Go Right?
Steemit could come out of beta and explode with
a massive amount of new users.
The "flight to safety" of funds into
gold, silver, and crypto could be epic.
The Bottom Line
Okay, so I can't tell you whether Bitcoin or Steem
will prove to be the better investment.
Hell, I can't even tell you that neither will drop to zero.
But I can tell you that I have no faith in fiat.
I'm going to hedge my bets and put any extra funds I have into Bitcoin, Steem, and silver. Sure, still doing a bit the old-school 401(k) way, but, as much as possible positioning myself in cryptos and metals.
What are your plans?
Disclaimer:
This should not be construed as financial advice.
I am not a registered financial advisor; I don't even play on on TV.
Do your own due diligence.
Batteries not included.
Objects may be larger than they appear in mirror.
Some assembly required.
Do not taunt Happy Fun Ball.
Photo credit: Pixabay
BTC = 1P535cxV1SXkPWj1GAqxv6PqHuaCBnsqJ2
LTC = LSQNA1bCUDXKBfN5bewzBngTczxDBxCQkL
ETH = 0xB86A902A1bedF3b47b20edB5f352187d191aA66F