Bitcoin peaked about a month ago, on December 17, reaching about $ 20,000. As I wrote, cryptocurrency is under $ 11,000 … a loss of about 45%. This is more $ 150 billion in lost market capital.
In the crypto-description, point to a lot of squeezing and gnashing of teeth. It’s a neck-and-neck, but I think the “I told you” crowd is better than the “excuses.”
Here’s the thing: it doesn’t matter if you don’t lose your shirt in bitcoin. Most likely, the “experts” you see in the press do not tell you why.
In fact, the collapse of bitcoin is wonderful … because it means that we can all stop thinking about cryptocurrencies altogether.
The death of Bitcoin …
In about a year, people will no longer talk about bitcoin in the market or on the bus. That’s why.
Bitcoin is a product of justified frustration. Its designer has openly said that cryptocurrency is a reaction to the government’s abuse of fiat currencies such as the dollar or the euro. It had to provide an independent, peer-to-peer payment system based on virtual currency, which could not be reduced because they had a limited number.
This dream has long been rejected in favor of raw speculation. Surprisingly, most people value bitcoin because it seems like an easy way to get more fiat currency! They don’t own it because they want to buy pizza or petrol with it.
As well as being a terrible way to do electronic transactions – which is painfully slow – the success of bitcoin as a speculative game has made it useless as a currency. If it gets so fast, why should anyone spend it? Who will accept it when it rapidly loses value?
Bitcoin is also a major source of pollution. 351 kilowatt-hours of electricity are required to process just one operation – which emits 172 kilograms of carbon dioxide into the atmosphere. This is enough to power a household in the United States for a year. To date, the energy consumed by all bitcoin mines can provide about 4 million US households a year.
Paradoxically, the success of bitcoin as before speculative game – not the intended libertarian use – involved government repression.
China, South Korea, Germany, Switzerland and France have imposed or reviewed bans or restrictions on bitcoin trading. A number of intergovernmental organizations have called for joint action to curb the bubble. The US Securities and Exchange Commission, which once seemed to approve bitcoin-based financial derivatives, is now hesitant.
And according to Investing.com: “The European Union is imposing stricter rules to prevent money laundering and terrorist financing on virtual currency platforms. It is also investigating restrictions on cryptocurrency trading.”
We may one day see a functional, widely accepted cryptocurrency, but it will not be bitcoin.
… But Increase for Crypto Assets
Good. Switching to Bitcoin allows us to see where the real value of crypto assets is. Here’s how.
You need a token to use the New York subway system. You can’t use them to buy anything else … though can Buy someone who wants to use the subway more than you.
In fact, if subway tokens were in limited supply, a live market could emerge for them. They can even trade at a price much higher than their original cost. It all depends on how many people there are I want to use the subway.
In short, this is the scenario for the most promising “cryptocurrencies” other than bitcoin. They are not money, they are icons – If you want, “crypto-tokens”. They are not used as a common currency. They are only good on the intended platform.
If these platforms provide valuable services, people will want those crypto-tokens, and that will determine their price. In other words, crypto-tokens will be worth as much as what people can get from their connected platforms.
This will make them real assets, with internal value – because it can be used to get something that people value. This means that you can safely expect to receive such a crypto-token or service flow. Critically, as we do when we calculate the price / earnings ratio (P / E) of a stock, you can measure future earnings against the price of the crypto-token.
Bitcoin, by contrast, has no intrinsic value. It has only one price – the price determined by supply and demand. It can’t generate future revenue streams, and you can’t measure anything like the P / E ratio for that.
One day it will be worthless, because it does not give you anything real.
Ether and Other Crypto Assets are the Future
Crypto-token ether is sure appears as a currency. Sold on cryptocurrency exchanges under the code ETH. Its symbol is the Greek capital letter Xi. It is extracted by a process similar to bitcoin (but less energy intensive).
But ether is not a currency. Its designers describe it as “a fuel for managing the distributed application platform Ethereum. It is a form of payment made to machines that perform the operations required by the platform’s customers.”
Ether tokens give you access to one of the most complex distributed computing networks in the world. It is so encouraging that large companies are coming together to develop practical, real-world uses for this.
Because most of the people who trade it don’t understand or care about its true purpose, the price of ether has been bubbling and bubbling like bitcoin in recent weeks.
But in the end, the airtime will return to a fixed price based on the demand for computing services that people can “buy”. This will represent the price real value can be evaluated in the future. For this, there will be a futures market and stock exchanges (ETFs), because everyone will have a way to assess its core value over time. Just like we did with stocks.
What will this value be? I do not have any idea. But I know it will be more than bitcoin.
My advice: get rid of Bitcoin and get ether on the next dip.