Cryptocurrencies crash! And the question is again, what now? Many want to continue to invest and are still bullish, others see the end of cryptocurrencies. There is something we can learn from the current market behavior and we believe the message is important.
Bitcoin is now down 35%+ from the all-time-high, other cryptocurrencies are following down. The reason for the current crash is the simple question: are cryptos going to be used for payment, and which one. With the latest tweets from Elon Musk, Tesla no longer would accept Bitcoin for payment, the market realizes that freedom has a price. It doesn’t matter what cryptocurrency you have and what you believe, if nobody wants it your investment is doomed. And who decides what crypto would be successful, when a reach businessman can change the fade of an asset with a quick tweet. Is that the type of asset you want to be invested?
Currently there are more than 4000 cryptocurrencies and they are growing quicker than mushrooms. But everything has an ending, and for most of the thousands cryptos the end will come sooner or later. We believe few will be successful. Which one and for how long? Nobody knows! If more and more countries make cryptocurrencies illegal, at some point they would end completely useless.
We don’t bite the believe: cryptos cannot be control, there is no centralization! Everything digital can be controlled including cryptos. How many platforms today allow you to buy cryptos without validating you? And how many people have the technical skills to create and use wallets outside of the most known crypto brokers?
There are some banks and payment services that are considering allowing their users using cryptocurrencies as investments or for payments. This was in our opinion seen falsely, as a sign that the banks believe in cryptocurrencies. Banks and other financial institutions does not need to be invested in the “assets”, they want to be your broker and that’s a big difference!
The success of Coinbase and the money they made in the past few years shows one thing: the best way to make money with cryptocurrencies is to be your broker! Nevertheless, we cannot underestimate the influence of the media and the internet hype around cryptocurrencies, do not make final conclusions. For ourselves, we stay away from crypto and we did not change our investment strategy.