RE: Is the cryptobubble about to burst? A calming post before the week-end.
Nice post! However, I do not understand the FUD people have about bubbles in the first place.
- Bubbles can only been identified retrospectively. History tells us it is almost impossible to predict the peak. Markets can stay irrational for a long time. Possible the smartest man of all time Isaac Newton lost most of his life savings investing in a bubble (https://steemit.com/money/@janusface/are-you-smarter-than-isaac-newton-if-not-do-not-think-you-can-escape-bubbles).
- Bubbles are healthy, creative destruction at play in laissez-faire capitalism, as you mention the dotcom bubble looks like a little bump in the road overall.
It would be even harder to predict the cycle top of digital assets.
How are they going to be valued? And what are they, money, digital commodities or stocks? For me they look like a tribrid of all of them.
I believe cryptos are most comparable to commodities. Take Ethereum, which is used as a digital commodity in most ICOs. What the total oil marked in the world to put it in perspective? My strategy is not to try predict market as a whole, but look at each individual security and diversify well (commodities, stocks, some fiat etc.). Going all in have been the best strategy in this space for years, but that does not look like a smart money strategy imo.
That being said, I believe we are far from the top. Just look at how panicky the market reacts to false FUD/ fake news again and again. The volatility too is still pretty high. I would be scared the day the market do not react to real negative news and the volatility goes down.
Like the perspective. Maybe I've joined in on the bubble focus a little too much myself. Maybe the comparrison is all just a waste, still it is a real phenomena that comes to everything from real estate to, as we all know by now, tulips.
Or maybe this time, the value is real. So a bubble would not form the same way and crash like that. Say f.eks. passive income tokens. They are likely to be valued according to the current expected payout, and tokens like Sub and Populous are not affected by the cryptomarket directly. Just thinking a little bit loud here.