Cyrpto is a bubble
Yes, I know this is not going to be a popular opinion, but that never stopped me. Also if we look around hive and splinterlands, it surely doesn't feel like a bubble. Yes, that is correct, I am talking about greater crypto, BTC, ETH etc. So what is a bubble, let us first define it, as everyone's understanding is slightly different:
A financial bubble, also known as a speculative bubble or an asset bubble, is an economic cycle characterized by a rapid increase in the price of assets, followed by a sharp decline in value.This phenomenon occurs when the price of an asset, such as stocks, real estate, or commodities, rises significantly above its intrinsic value, driven by speculation and irrational exuberance rather than underlying fundamentals.
Now that the term bubble is defined, let us focus on crypto. Most people in this space will say that crypto bull market is only getting started. I would agree with them. However, that doesn't mean it is NOT a bubble. One of the critical element of defining a bubble is to first understand the 'intrinsic value' of the asset in question. In case of crypto it is not easy to define and there lies the problem. Lets try regardless to put some value into the crypto world:
- Decentralization. Lack of single point of failure
- Rare (at least in case of BTC)
- Store of value
- Alternative currency without govt. control
- Tokenized world: a token/NFT for everything
- Fast feeless (not really, most crypto are not as fast as fiat, and certainly not free)
I can increase the list a lot longer, but it is useless. The problem is, how many alternate currencies do we need? 10, 100? Certainly not 1000! There are not 1000 federal governments in the world, so there are no possibility of 1000 real world currency. However, as per coinmarketcap, there are thousands of crypto with with total marketcap of $3.6T, but with BTC alone has a marketcap to ~$2T.
Did you notice we still 'value' the price of BTC in USD, and so with the marketcap. So my question to all the fiat-haters out there is, why? You say you don't need USD or fiat in general, so why every crypto is still priced in USD? Let me answer, because there is no substitute for USD. Thankfully all Splinterlands assets are priced in USD, have you ever imaged what would have happened if they were not? Let me answer again, Splinterlands would not have exist now.
I am not calling for death of BTC or crypto
I am very aware on how many times BTC death was called and it was all wrong.
https://99bitcoins.com/bitcoin-obituaries/
What I am saying, we need to start treating crypto like an asset. For every asset there is conventional meature of 'value' and 'utility', and 'regulation'. We need all three of those in crypto. If it remains wild west then it doesn't matter how smart you are you will fall into the trap, sooner or later. Even Sir Issac Newton couldn't avoid the allure of the South Sea Bubble. Please have a read.
It is high time to ignore memecoins, and 99% of the coins which has no utility. Only focus on the assets you need, sell everything else that doesn't do anything or trade on vaporware or false promise. Take profit now, and invest in a house, or land, or buy some bluechip stock on a dip. Thank me later.
Just about every year my husband and I would go to Las Vegas (we married there, so it was kind of a ritual). He would play poker and I would play the slots. At the beginning of the trip I'd have a budget...literally, money I could lose without wincing. That's how I approach investing, in anything. (I don't consider my house an investment. It's my home.) Since I don't understand the markets, to me it's always a gamble and I never gamble with money unless I can afford to lose it.
I've had a few unpleasant experiences with 'the market', so these days investing for me amounts to not spending. We are long past our earning years.
I've never had a bad experience with Hive because I don't expect anything from it. I enjoy being here, and have the vague hope that someday, if I'm steadfast, I'll be able to leave it to my children. I do hope it accrues in value for when that day comes.
Well said @agmoore
It's best to only invest or speculate with funds you can afford to lose as you so rightly say.
Hopefully Hive is on the way back to $1.
Wouldn't that be something?
🌟
Oh yes, for sure😇
That is a very nice story. This is how perhaps most people's life should be.
Only bet on things you can afford to lose and can do it for fun. That is the main learning I have taken from your story. I can't say I followed that with my life but majority of my academic research on geosciences is trying to understand the tail end of a log normal distribution, something that people call a black swan event. Later on when I got employed I was paid to take a bet. Thankfully it's other people's money so it's great. There is little emotion attached to what I do financially and that became a good thing for me.
You must be very bright for people to give you such responsibility, for people to believe that you can prepare for (or perhaps predict) such events.
Those of us who have the chance to grow older, have the opportunity to learn from our past. At least you learned. That's what age is for, isn't it?🍁
Haha, seems like your unpopular opinion is mostly agreed upon by the other commenters. The problem for me is that most assets produce income. Real estate provides rent, commodities are needed for industry, some stocks provide dividends, bonds/cash provide interest. Crypto doesn't really produce income unless it creates more crypto (like Hive being minted every day). The only real way to make money in crypto is for you to sell it to someone else for more than you bought it, and the buyer needs to believe they'll be able to sell it to someone else for more than they bought it.
If that's true (and it's been mostly true for BTC so far) then why would anyone spend it if it's truly deflationary? That means its not useful as a currency (ie, the Bitcoin pizzas).
That said, I do think a lot of things are currently in a bubble. Housing in lots of countries, for sure, stocks like Tesla and Nvidia as well, maybe even the S&P 500. There seems to be a lot of cash sloshing around at the moment, I don't know how long that can last.
Well, in the US, we are in a bull market since 2008! That is 16 years. Obviously there is a lot of money sloshing around. If you kept a job in the US for this time (which is NOT a given I must say), there is almost nothing you can do wrong if you have invested in the stock market.
I have learned that all party eventually end. I do not know when this one will end, but it will.
Wise words @azircon wise words indeed..
At some stage it will surely come crashing down, but I think there is a good bull market to capitalise on for a while yet. You can never perfectly time the top of course, but I suspect there's lots of growth to come yet if previous cycles are anything to go by.
This is not an unpopular opinion I'd say, only an informed one, agree also that most of crypto including memecoins and coins with no utility are just especulation, as you said.
Normies are still claiming that crypto as a whole is a scam, when there are such interesting tools as BTC or Hive. As I always try to remind, don't blame tools for how are used but blame to those who use them wrongly.
Yes, for people who are here long enough typically understand it, it's the noobs I worry about
I definitely think the whole .com thing is evidence that something can be a bubble and still be viable. The two things don't have to be mutually exclusive. Kind of like evolution and creation, but that's just my personal opinion! :)
Yeah I am sure you remember the year 2000! Then year 2007-08.
Yeah, good point. It's not like people just stopped buying houses is it?
Bubble or no bubble I wish I would have some BTC right now.
But I only have Hive/HBD. I think that in the future I will power down a bit of Hive and change it to HBD. But I don't intend to sell either Hive or HBD for maybe another 10-15 years. Hopefully by that point I will have enough to really improve my life. Right now my account is worth a few k dollars so it is not really life changing amount.
You don't need BTC at this price. Hive/HBD is fine.
I have been taking profits in BTC, have less than half of my BTC position remaining. I have not started taking profits in ETH. I feel like BTC has almost played out, but altcoin season just started and we might have a month to six months of speculation trading in things like SOL, Airdrome Finance, etc.
I am staying away from Memes as I don't get them.
I think this was only the first leg up for BTC 😁
Fine idea.
There is nothing to get from memes, its a pump and dump.
Completely agree on your view and especially on the utility point
When I see a memecoin worth more than HIVE I always think that utility is not considered but is the most enduring asset of any project.
@tipu curate
Upvoted 👌 (Mana: 23/43) Liquid rewards.
Memecoins are vaporware, and pump and dump.
Can you make money in them? Yes. Do you want to? No.
It's a bubble we can roughly time in 4 year cycles so I'm perfectly fine with them 😀 and you're right, when my crypto sell orders gets hit when things get crazy, I'm putting the FIAT in to paying off my mortgage (and save some of it to buy back in the next bear)
Crypto is mostly not taken by investors seriously, not yet anyways. If we don't get our house in order soon, it will never be taken seriously.
Totally with you.
Not only the crypto market, but the stock market too. According to the Buffett Indicator, we are way too high. It's no surprise he is selling so much and is sitting on a pile of cash—he probably is preparing for a big correction. The S&P500 is above historic highs. The last time we hit this level was 2008. This is the same level we hit before the infamous 1929 crash.
It's no time to panic, but yeah... I think we can recognize that we are in a bubble, and some caution would be prudent. At least we should avoid these dumb memecoins.
Sell some, and put into a small apartment in Tokyo I say :)
Sorry, the best I can do is make some bids on Heloise and continue buying A/B/U gold foils. I won't be selling any gains until March, when I think we will hit our first relative cycle top.
I believe it is priced in USD because it is currently the world reserve currency. Of course, people can compare crypto to their local currencies through different software and exchange platforms. However, I know plenty of crypto traders who don't price things in USD, and instead look at how the alt coins trade against BTC.
This is quite a telling metric, especially when it comes to alt season to see how certain cryptos are faring compared to the alpha asset, BTC. So far, a lot of the L1 proof-of-stake networks have seen their blockchain tokens rise: XRP, BNB, SOL, AVAX, ADA, ALGO, POL, etc.
I don't trade much with small/micro cap tokens besides $SPS and $HIVE anyways, and even those two, I get them mostly by earning and not buying from the market. Thanks for your advice and for tempering all the jubilation. Taking profits is always an important part of any bull cycle. I nailed it spot on in November 2017, but I definitely let it slip a bit this last cycle in 2021. At least this last bear market I was DCAing into BTC from $16K all the way up to $100K. Keeping that part automated so I don't do anything silly!
and why is that? Not only it is the world reserve currency, but also it is most popular, and that is why it is the reserve.
It is interesting to compare BTC price vs. Gold price as inflation-resistant stores of value. When Trump turns on the money printer, we will see both of these assets rise because the USD is getting weaker. That is the intrinsic value!
I saw an X post about comparing BTC to gold not USD, which is interesting.
Yet how much is BTC? About $100K :) it is priced in USD :) how ironic.
Memecoins amuse and infuriate me in equal measure.
Amusing because of their wild pump and dump antics, surges that eat eye-watering zeros from the right-hand side of the decimal point, and their cult-like evangelical communities.
Infuriating , because they suck up and generally destroy valuable capital that could have been deployed into projects with solid usecases. They also tarnish the reputation of the space in my view.
Having said that, I have joined in the fun, I hold a little Shiba Inu snd Bonk and in the past I held Doge. But lets be honest , it’s gambling, pure and simple. If you know that,can afford that and want that, all is fair in love and war.
Whatever my view, I’m pretty sure this cycle will go down in crypto history as the “meme cycle”
Memecoins, and similar vaporwares that are prevalent in crypto space are the main reason crypto is not mainstream. This is the reason we are wasting away and not attracting any capital, because people/investors wants products and utility in the end, not useless hype
Not all cryptos are necessarily primarily currencies. Like you say, they are assets. The value of those assets is determined in part by their utility (well mostly by speculation these days but in the long term). There could be 1000 just like there can be 1000 stocks. But they have to have something to give them a value other than just being a currency. Ultimately, there could be 1000 successful cryptos. That doesn't mean that all of the ones that exist today will survive with any meaningful value. I'm sure that most will not.
If they are stocks, then by definition they are equity. Then by defition they need to be regulated and they will fail any such scrutiny. So they are a failure.
A bear market will arrive and most altcoins will drop in price by 10x or more. Even Ethereum can fall in price by 10 times. And then I will buy a lot of HIVE, maybe 1 million HIVE.
cheers to that
BTC alone is a hundred which carries a market cap of $2 trillion. The other coins have a market cap of $1.6 trillion. What will happen with 1000 coins? I think 10-20 coins is enough to invest. Very good post, lots of information
they will all die
You've got to call it as you see it and I can't disagree with most of your logic. I strongly agree that Meme coins and 99% of other coins are just pure speculation and will be a guaranteed way for certain last Bag holders to lose a fortune.
I have already taken out some gains for real life things, but I have plenty left and majority has been exchanged into Bitcoin. I'll ride some waves for most of 2025 and will start planning an exit strategy then. I'll use some for house renovations and invest in stocks like IBM that pay a dividend as well as having a good future price prospects
You are loved. This is good. Feelin it. 🔥
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