Everytime I think about this, I feel that this market has all the ingredients of a bubble. 1. It has a story that sells. You really can't expect bubbles to form in established industries like manufacturing. Cryptocurrencies on the other hand has a new, technologically advanced feeling to it. Regardless of whether blockchain tech changes the world, it's a great selling point. 2. It's incredibly easy to buy cryptos. Making an account at a bitcoin/altcoin exchange is almost as easy as making an email account at google. This is why we have so many average Joes participating. I'm based in a Southeast Asian country, and a lot of people here shun stocks but buys crypto. It also helps that you can buy cryptos with a small amount of money and get your feet wet. 3. To put things in perspective, during the dotcom bubble era, market cap of tech companies reached 3.7 trillion dollars at its peak. The market cap of cryptocurrencies as a whole is at 0.5 trillion currently. That was 20 years ago and capital markets have gotten bigger, so if things get crazy as back then, the market cap could go easily above 5 trillion. Also note that crypto markets are international markets, not confined to the US only. 4. The supply demand characteristic of cryptocurrencies are perfect for spectacular melt ups. First of all, the supply is capped so you can't increase supply in response to price increases. A significant part of the supply is held by founders or the few individuals who got in the game early(bitcoin and alts alike), and they don't trade actively. Thus the circulating supply is small, when price moves people jump in(fear of missing out), and we get 400% moves in a day like recently in XRP. 5. The bull market of 2017 was fueled mostly by retails investors. Just think about how prices would move if institutional investors start piling in. Crypto oriented hedge funds are popping up left and right, and we are now entering the mass adoption phase. Michael Novogratz said that this is going to be the bubble of our lifetimes, and I think he is right. All the ingredients are here for this thing to metastasize in to something big.
Point 2 , it is not as easy to buy crypto as opening an email account at google , unless google arn't telling me something,it is subjective , but for most people I suspect that's very close to a fact. Point 4 , and this is important , individually maybe capped , but cryptos arn't , google it and you'll see a huge supply of cryptos coming down the pipe .
I tried twice at coinbase and gdax to get verified, no luck. Gemini and bitfinex, still waiting for verification. Luckily I had an account at bitstamp but they are so busy incoming wires are not being credited. Kraken is incredibly slow but will be upgraded this week. The only exchanges working properly are crypto only, no fiat, ones like binance and poloniex. Bittrex has problems and you can only transfer out $25k in crypto per day from poloniex. If you want to buy crypto I would try www.localbitcoins.com but you will pay a premium.
1. Story isn't necessary. People are GREEDY and on average don't give a shit about the future of cryptos as long as it makes money for them. It mostly isn't "I bought TSLA because I believe in Elon Musk." 2. It is STILL incredibly hard to buy cryptos as others pointed out. Banks still don't like to deal with crypto exchanges. 3. I always hated the market cap references or analogies. Did you know that Pekicoin has a market cap of 10 billion dollars? I sold one for a dollar and premined 10 billions... 4. Supply is UNLIMITED, don't kid yourself. Specially now when FORKS are a good business, there is no supply problem with new and old cryptos. Oh yeah, most cryptos are inflationary, just for the record. 5. I actually agree on this one. For a venture capitalist, it is easier to spread his waste money among 5 cryptos then messing with 5-10 new investment ideas. But do you realize that we are one terrorist use/huge blackmailing away from a US/worldwide ban??? 1/3rd of the world already banned cryptos from their intended use, currency that is.... (India and China) Another points: 6. It is incredibly easy to lose cryptos. You send it to the wrong address, sayonara my friend, nobody is going to reimburse you. 7. It is very easy to STEAL cryptos. One story on reddit: The guy agreed to buy a bicycle using Bitcoin. (so the "seller" knew there would be crypto) When they met, the seller showed a gun instead of the bicycle and took the buyer's phone. All cryptos were gone...
Not nuts...I pictured a thuggish bandanaed black meathead just robbing a geek of his smart money and pistol whipping him for the passwords.
the problem with crypto is that it's anonymous, good for your but bad for government when people use them to launder money and fund terrorism.