Cryptocurrenices, The Craze was Actually Round 2 Funding
The crash can be explained as follows, or at least this is my idea of what’s going on — I could be totally wrong:
Big time investors put money into this experiment (Ethereum, Litecoin, etc.), like they did in the early 2000s as a way to fund these researchers. The price went up and small timers followed suit, allowing for more funding.
These companies (the teams making these coins) and investors extract profits with their currency (not through their business model). Think about these coins as seed funding and IPO combined. When investors are happy, they pull out.
Now we wait for these companies to issue something of value, and when they do, money will flow back in. There will be another boom and the same story will unfold. Eventually, micro-economies will form and cryptocompanies will behave exactly like today’s companies. A public distributed ledger will exist, but many of the teams behind these coins will behave like private companies.
Would love some feedback on this idea. I’m probably missing some crucial details which may pivot my thinking.
What are your thoughts?