Why is it inevitable? And exactly what is inevitable? There are literally thousands of various cryptocurrencies and projects. No doubt many of these are superfluous and some are outright sh*t and will eventually implode. I don't think even the biggest believers of crypto will disagree with that. However, I 100 % believe in Bitcoin and that cryptocurrencies are here to stay. Exactly how it all will play out nobody knows, but I'm quite sure Bitcoin have a future and most likely will continue to appreciate in value. I understand the role BTC have in this cryptosystem and that's more of a store of value / digital gold and benchmark for other cryptocurrencies / fiat money. At least that's how I understand it. I don't think the comparison with the dot com bubble is comparable as that's apples and oranges. I can elaborate on that if it's not obvious. Also, on a general note I think it's a mistake that we always look to the past and try to make sense of the present/future in light of that. The world today is different than the one in 2000 or other times in history. That's not to say bubbles don't exist as they surely are abundant today as well. Personally, I don't think Bitcoin is one, though. Dogecoin or Shiba Inu? No doubt.
Maybe but I doubt we'll see many more 10,000% ascents from bear market low to bull market high. Maybe we won't even see many more 80% crashes. It will be interesting to see how many investors (speculators) quit BTC if it is no longer perceived as a chance to make a quick 1000%.
How do you value something nobody knows how to properly value? I'm sure most players don't expect wild appreciations from BTC at this point moving forward. Those days are probably long gone. But a long term trend higher seems likely. Maybe $500K within the next 5-10 years. To make a quick buck I think most are investing in alt-coins.
On a general note, I think it's a mistake that those who haven't experienced much history make to declare "the world is different" to dismiss anything that could be learned from history. Funny thing is, "the world is different" justification was used extensively to justify the then current state of the .com bubble in the months before it popped. History doesn't repeat itself but it does rhyme, as Mark Twain apocryphally said. As I have said several times here, much like the internet, cryptocurrency does have underlying value. In 20 years it's actual value may approach what it's trading at today. Between then and now, a whole lot of failure is going to happen, the names you thought were winners are going to go away or become niche, and the winners will be either unexpected or companies that don't even currently exist. You are correct that there are different specific reasons why the current bubble companies will fail. For example the "stablecoins" will fail because they're all an accounting fraud that would put Enron to shame. The general "mined" coin will fail because the energy use to support something like BTC being used to support a significant percentage of the world's transactions is an order of magnitude more than the current energy production on earth, and a bunch of people on earth are actually trying to reduce energy use. You haven't even begun to see the hostility that will result when people start to see their power bills go up and coal plants come back online so that we can have....what is the indispensable thing your average everyday person gets out of crypto again? But much like the .com bust, the sector is clearly in a massive bubble with a market cap that far exceeds any real utility the sector currently provides or will in the near future, full of fly by night opaque companies, and full of evangelists who live in a bubble and don't realize that 98% of the real world could give FA about anything to do with their revolution. That's not a recipe for continued uninterrupted growth from here!
The level of global central bank support/intervention in capital markets I believe are at unprecedented levels in modern history. Sure. I refer to Bitcoin specifically. There's no doubt that there's a lot (if not most) coins/projects that correctly deserves to be called sh*tcoins our outright scams. Maybe, but that actually already happened and it's not because of BTC mining that we're seeing inflation worldwide. Why isn't there more hostility already in the US where the wealth gap continues to increase as the working class lose their buying power day by day while the wealthy upper class continues accruing capital gains on their investments?
Earlier this year, BTC's energy consumption was on a par with Argentina or Norway. https://www.bbc.co.uk/news/technology-56012952 If the price does go up into $6-figures, then it's consumption may exceed that of a G7 country. That might start sounding serious alarm bells.
OK. That really has nothing to do with the common tendency of those who haven't much experienced history tending to incorrectly dismiss the value of studying history. In every bubble the people inside the bubble, without the benefit of hindsight, can point to something unprecedented occurring at the time to justify why "this time it's different". But the rhyming part is that the bubble still always pops. OK, so if we need an order of magnitude more energy for BTC to be used in a significant portion of the worlds transactions, and we all realize that much demand would drive up energy prices significantly. How is the fact that we already have inflation somehow answer that critique? If anything, it makes the potential problem even more acute. You admit we already have a problem and are advocating for dumping an even bigger problem on top of it! Sorry, that just doesn't make any sense? Energy usage is the dirty little secret of crypto, it's no wonder those in crypto try to change the subject as fast as the can when it comes up. There's actually a pretty cool heuristic out there for what causes political change based on how diffused the problem and solution are and how acute the impacts are combined with the interests involved. Crypto is an easy one. A big population sees their power bills go up and/or a bunch of extra pollution happening, things big swaths of the population personally care a lot about. They identify a single, easy to target source...crypto. The crypto evangelists are by and large 15-30 year old fanbois, and if it went away tomorrow it would have zero impact on 98% of the population. That's not a recipe for longevity in a democracy. A wealth gap where corporations and the wealthy can make unlimited political donations to PACs and have set up power structures literally for centuries? Unfortunately democracy can't handle that one so easily. Again, crypto and blockchain will be a big part of the world in 20 years. That doesn't change the fact that there will be a huge amount of pain in the near future for those who have once again decided that "this time it's different" and think we can get from here to there without a giant popping of the bubble. All is not lost though, I think the key thing is for guys like you to keep enough powder dry so that you can pick up the pieces when the bubble pops. Just like we're being irrationally exuberant right now, history tells us that when the bubble pops we'll be irrationally pessimistic. If you're someone who saw that coming and don't lose it all when the music stops, you can pick up one of the valuable pieces of the ecosystem and run with it for pennies on the dollar and in 20 years you're....the crypto equivalent of one of most of today's successful internet companies.
Who dismissed the value of studying history? I've read plenty of history - including books that specifically deal with bubbles and manias. I never said bubbles are a thing of the past and that history won't repeat itself. I very much believe that plenty of the cryptocurrencies we have today will implode at some point. I don't think it will happen with BTC, but admittedly, I do not know and don't have a (very) strong opinion either way. Actually, I never advocated that. If there would be some kind of regulation that puts a lid on BTC mining it would only make BTC even more valuable. Not really, although it's easy to get that impression. Just like one might think that it's only teenagers that trade stocks through Robin Hood. No disagreement there.
Actually you did say "Also, on a general note I think it's a mistake that we always look to the past and try to make sense of the present/future in light of that. The world today is different than the one in 2000 or other times in history." but I think we're in agreement now. Again, in response to me saying that BTC mining will skyrocket energy use and cause an increase in energy prices you replied "Maybe, but that actually already happened and it's not because of BTC mining that we're seeing inflation worldwide." Would you mind expanding a bit on that comment, because I think I missed what you were trying to convey? I feel that your view of BTC is only taking into consideration the supply side of what is of course a supply and demand curve that determines price. BTC is only valuable to the extent it performs a function. It's value now is based on speculation that it will begin to be used for a good portion of the world's financial transaction. If all it ever ends up being used for in transactions is ransomware, money laundering, and drug buys plus the current user base using it where they can, it's worth a tiny fraction of what it is now. You can't just assume the demand side stays constant or growing when it's almost entirely based on speculation right now. Anything with lasting value will have to move to a much wider transaction base or else the price will drop to reflect it's actual utility. And if you move to a much wider transaction base, your energy use skyrockets. The energy use is the achilles heel of BTC. If BTC use grows to the point it justifies its value, energy use becomes prohibitive. If it doesn't grow to the point of prohibitive energy use, it's current price makes no sense. You've got to address this energy use issue head on, otherwise you're ignoring an issue that's easily as big as the issue of the assets securing the so called "stablecoins". I guarantee if you or I go anywhere in America outside of a couple tech centers and asked 100 people if they've actually bought or sold something using BTC you wouldn't get more than a handful who actually have. I've lived in Silicon Valley, I've gotten caught up in the bubble and began to thought that everyone must be as familiar with and using the tech I see everyone around me using. But that's not the real world and doesn't reflect the real world. In Topeka KS and Lafayette, LA, and Tucson, AZ and thousands of similar cities large and small no-one is using BTC for transactions. Even most of the fanbois are just speculating, actual transactions are limited to the true evangelists and criminals. You and I have done crypto transactions, but we're in a distinct minority and need to remember that. BTW, although this conversation has nothing to do with Robinhood, according to Robinhood themselves, the average Robinhood user is 31 years old and has a median $240 account balance. That's exactly what I would have suspected given you need to be 18 to open an account, although I would have guessed around 27 as the age.