Hey Crypto Lovers,
This quarter has been a phenomenal run for BTC and the entire decentralized crypto market. With BTC exploding past its All Time High and racing full speed toward new heights, there is a lot to be excited about if you have been a longtime blockchain believer. One thing for certain though is, this Bull Run is far different than 2017, and for that reason we can expect a different future.
For weeks I've seen countless people shilling new projects and advertising an "Alt Season" that will soon be upon us. Thousands of hungry investors are lining up in desperate search for a get-rich quick scheme. Normally that looks a little something like this:
*First a team of Devs forks an existing chain and claims that somehow they will be able to alter the tokenomics to make it more favorable. Next they roll out a pre-sale, exciting a few dozen people that they will get in early and be able to see 100x once this rockets to the moon. They release a temporary "roadmap", which usually starts with liquidity lock periods, promises of Coin Gecko and other broad exchange listings, and big "news" in the form of some Medium article that will shake the very foundation of the Cryptoworld. Then the shilling begins. People take to twitter and telegram to ramble about some phenomenal DeFi invention that just by holding will earn you passive income until you can afford your Lambo.
The problem is, much like in 2017, most of these projects are utter trash. Even if the tech is "rug proof" and the code is so delectable that you would give your last pennies just for a taste, these projects have no real use case and no community. A group of 500 piranhas sitting in TG group sharing memes and trying to break the world record for how many different ways to ask "When Moon?" is hardly a community. By the time the large wallets have extracted every drop of ETH they can from the liquidity pools, they slowly fade into a painful irrelevance.
I remember the infamous "Alt Season" of 2017. There was a new ICO every day. The value of ETH had been driven up to an ATH and money was pouring into Coins and Tokens. They all had the same Whitepaper with just a few words they were kind enough to change, just so we felt they made an effort (Except for Justin Sun and Tron, they never made much of an effort to pretend). But what was so crazy about 2017 was the hype. All you had to do was whisper the word "blockchain" in a cafe and 50 people would swarm within earshot to lend their TRX. Studies showed that a business would increase its value 10 fold just by mentioning they would use Blockchain technology in the future. The FOMO was hard and everyone was looking to get a piece. The reason it never had a chance was not because of who was "in", but because of who was absent.
What makes this year different? Institutional money. I'm a romantic. The romantic Bitcoin story is that Satoshi Nakamoto created BTC in order to spark a financial revolution. To take away power from the institutions and return it to the people. Bitcoin was to be a worldwide currency, immune from government intervention and manipulation. While the outcome is debatable, what is certain is that no currency would stand a chance in a Global world without institutional adoption. What's happened this year is that Hedge Funds and Investment Banks have accepted that Bitcoin is here to stay - That makes what's happening now all the more different.
When I hear people talk about "Alt Season", they are naively missing what's happening here. Those that have an understanding of Economics and financial markets see. The Covid19 Pandemic has led to a crash in the Bonds and Sovereign Debt market. Interest rates have plummeted. That forced Billions of dollars into the Equities market in search of returns against expected inflation, but that will also create an instability in the equities market. Money Managers are now seeing exactly what Satoshi Nakamoto had forseen, that the world needs Bitcoin as a kind of store of value.
Bitcoin's market dominance has risen to 70%+. That will likely continue to rise over the next months. The Alt Season is not coming, and the biggest reason is because most of the projects are garbage scams as I outlined above. It is only serious projects that will ever have a chance of catching any sustainable spillover from the massive influx of cash in to the Crypto market. Projects with a community and a use case will survive. Professional teams with proven reliability and talent. Projects like HIVE and LEO. I joined Steemit back in December 2017 when I was digging for gems. I've said many times, the origin story of HIVE and its leverage by LEO and other dapps are proof that this community is vibrant and has a future.
There are other great projects out there with vibrant communities and brilliant developers. The Web3.0 revolution is here, but it will be through careful nurturing and strength of conviction that we are able to fulfill the dream of a decentralized economy. That will never happen so long as people keep viewing projects as "get rick quick" schemes, rather than understanding the political and economic implications that they have in the long term. No - Alt Season is not coming, but the era of decentralized finance has only just begun.