Chapter 1: The History Repeats Itself

It's entirely your choice to overlook the chance to be part of a groundbreaking era.

Photo by NASA on Unsplash

Consider the individuals who mocked Jeff Bezos for operating an online bookstore from his garage during the 1990s. Many must have thought they were clever at the time, branding him as ludicrous. Yet, it’s unlikely they find it amusing today. A similar attitude is prevalent in our current environment. We have those, dubbed "the believers," who are confident in the future of cryptocurrency, and I count myself among them. These believers might appear foolish now, but they are convinced their early involvement will yield rewards. On the other side, skeptics are hoping to revel in the downfall of cryptocurrency, waiting for the inevitable market crash to validate their doubts.

If a crash does occur, believers will likely seize the opportunity to acquire more assets, anticipating a resurgence in the crypto market. Even during a downturn, the lows will be higher than those seen in previous bear markets. For those with a long-term perspective, the potential rewards are substantial.

Bitcoin's Value Against the Dollar

The remarkable surge in Bitcoin's value has not gone unnoticed. While it continues to appreciate, it’s essential to remember that one Bitcoin remains one Bitcoin; it is the dollar that is losing value in comparison. Bitcoin advocates may sometimes be labeled as irrational, but they are not tethered to a depreciating currency. Over the past century, the dollar has lost more than 96% of its purchasing power relative to gold.

It raises questions about the future of the dollar as the global reserve currency. If you think it’s immune to change, consider the British pound, which once held that status but eventually lost it. There are no guarantees for the dollar's longevity either.

Photo by Vladimir Solomyani on Unsplash

Inflation acts as a silent threat to the dollar, gradually eroding its value much like boiling a frog in water. If you place a frog in hot water, it will jump out immediately. However, if it starts in cold water and the temperature rises slowly, it will not escape until it’s too late. This gradual inflation is why many are searching for reliable alternatives to hedge against the dollar and fiat currencies.

Holding onto fiat currencies pushes individuals to seek out better hedging options since saving in banks can hinder economic growth, given inflation’s impact. In contrast, Bitcoin has shown an average annual growth of 200%, promoting saving rather than diminishing it, making it an appealing hedge.

We often hear that capitalism is to blame for the wealth gap, but while it plays a role, the real issue lies in excessive money printing. In today's economic climate, merely saving money can lead to financial hardship as everything becomes pricier. Bitcoin, on the other hand, encourages saving.

Bitcoin's Unique Backing

Critics frequently claim that Bitcoin lacks intrinsic value and isn’t backed by anything. While this may hold some truth, I have a different perspective. The most valuable commodity in today’s world is computing power, and Bitcoin is underpinned by the strongest computing network available. Four years ago, during the last bull run, the Bitcoin network's processing power was equivalent to 2 trillion consumer laptops, far surpassing the top 500 supercomputers.

Though the current processing strength has only improved, it’s worth noting that Bitcoin's resilience is remarkable. To successfully execute a 51% attack on the network is an immensely challenging feat. I liken blockchain technology to oil; while discussions about its environmental impact continue, oil significantly improved global living standards, and Bitcoin and blockchain technology are poised to do the same.

Photo by Marko Blaževi? on Unsplash

Chapter 2: Coinbase's Milestone and Its Implications

Coinbase's recent IPO marks a significant event for the cryptocurrency community.

This development is a testament to how far cryptocurrency has progressed, especially after years of skepticism from traditional financial institutions. The IPO highlights the institutional demand fueling the ongoing bull market. As the largest crypto exchange in the U.S. and the first major cryptocurrency startup to go public, Coinbase offers a gateway for those previously hesitant to invest in cryptocurrency. Investors now have a more conventional avenue to gain exposure to this burgeoning market.

The excitement surrounding Coinbase's IPO is unprecedented, with sky-high valuations accompanying it. This asset has the potential to perform well across both bull and bear markets, given its anticipated high trading volume. It also provides a chance to rebuild trust in cryptocurrency, which was significantly damaged by the Silk Road, a platform notorious for illicit activities. With Coinbase and other significant players in the industry, there’s hope for restoring confidence in the crypto sector.

Photo by Meriç Da?l? on Unsplash

While the IPO may have initially caused a dip in Bitcoin and other crypto-related stocks, I see it as a minor setback before a much larger advancement. Although it debuted at a high price, we may look back on this moment years from now in the same light as Amazon's IPO. I view this as a bullish sign for the future of cryptocurrency. What are your thoughts?

Author’s Note

I want to emphasize that while I am a finance professional, this piece does not constitute financial advice. It’s meant to shed light on the current market situation. I encourage everyone to conduct their own research and seek the information they need.