Are Cryptocurrencies Dead in 2019 and beyond? (August 2018 Update)
The Cryptomarkets reached an all time high in December 2017 and since then we’ve seen a collapse of epic proportions.
But is this the end for Bitcoin, Ethereum and the rest of the coins?
I’m going to give you my take, but first let me give you the textbook answer:
…
Well?
The short answer is it depends on who you ask.
I recently interviewed Kim Snider Hughes from Sane Crypto and she had quite an interesting take-
Kim believes you should invest no more than 2% of your wealth in cryptocurrencies, that way you can preserve the bulk of your retirement savings but still have some exposure to the new bright and shiny investment class.
And while cryptocurrencies can be seen as an extremely high risk asset class, there is a lot of truth in her philosophy.
Kim believes that Cryptocurrencies are here to stay and believes a conservative investment approach is appropraite.
It’s crazy to think how many people invested their life savings into crypto-
On the hope and dream that it will turn their somewhat underfunded retirement savings into a gold mine overnight.
Sadly, most of these people lost a ton of money during the crash in Winter 2018.
Was the lesson learned?
To be fair the lesson was taught a long time ago and anyone that’s seen Spiderman will know what Uncle Ben Taught us:
“With Great Power Comes Great Responsibility”
The Rise of so called “Risky Assets”
Bitcoin became a household name in 2017.
Heck- everyone had an opinion on cryptocurrencies.
But that’s exactly what it was-
An opinion.
“Bitcoin” topped #2 in search traffic in 2017 on Google in Global News and “How to buy Bitcoin” was the third most searched term in the “how to” category.
Let’s be honest with ourselves-
We’ve pumped so much air into that bubble it was just waiting to burst.
But to be fair even assets that have been classified as “low risk” have still been known to fail.
Just look at Enron, WorldCom and a ton of other “safe” investments.
In life there will always be opportunities and with those opportunities comes risk.
So 7 months into 2018- Where Are We Now?
Looking at the “blue chip” coins Bitcoin, Ethereum and most of the other better known coins have seen pretty conservative growth.
But price growth aside- we’ve also seen increased adoption of cryptocurrencies-
The Marshall Islands became the first country to recognize cryptocurrency as a legal tender. (If you had to check the map it’s off the coast of Papua New Guine)
And Venezuela became the first country to launch its own cryptocurrency the virtual Petro (backed by crude oil reserves).
In March 2018 the Lightning Network went live, marking one of Bitcoin’s largest issues resolved- the time to process a transaction.
One of the largest “pocket investing” applications, Robinhood added Robinhood Crypto to it’s user base.
All these events point to increased mainstream adoption and while investors still appear wary, adoption ultimately drives price.
So what do I think?
When I began this article I asked whether cryptocurrencies will be dead in 2019 and beyond, but ultimately to get there you need to look at the present to answer that question.
Based on short term and long term factors-
I believe that Cryptocurrencies will continue to increase their presence as an investment class and thus will not be dead in years to come.
However, I also believe that like any investment, you need to do your research before buying.
Call to Action
One of the biggest things I teach at Chain of Wealth is how important it is to diversify.
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