People often ask me if the cryptos are a bubble that has popped, or if there’s going to be a rebound in the price.
The simplest way that I see it, and the answer that I offer, is to watch the adoption.
Because essentially you could think of the current investment stage of cryptos as similar to a start-up, where you may or may not have a great idea. Yet the true success comes when the market adopts and has demand for the product.
In terms of cryptos, this can be seen in the adoption. A growing list of companies, governments, and merchants are using and accepting it. And I continue to hear it’s being used in places like Venezuela where the paper currencies have already started breaking down.
So do the issues with the current dollar system still exist, and are they larger and more extreme than ever?
If so, then that would also support crypto prices going back up.
Because none of the underlying fundamental technology has really changed between when Bitcoin was $3,000, or when it was $20,000. That’s a lot of trading activity, that also includes manipulation, which has little to do with the underlying fundamentals.
So if you think all of the conditions described above are still in place, and you continue to see adoption, that’s a pretty good sign from an investment perspective.
June 3, 2019