The Current State Of Crypto Investing
Sometimes life just isn’t fair.
When I was growing up in the 1960s, my parents said to me, “Listen to your elders. You need to learn to respect their wisdom. Someday when you’re older, young people will listen to you.” So, I listened to my parents and grew up respecting the wisdom of those older than I was.
But that notion has been turned upside down: Nowadays, people my age need to listen to and respect the wisdom of people who are younger than we are.
Today, people of all ages are in trouble because their ideas aren’t just old, they’re obsolete.
In a rapidly changing world, nothing is more dangerous than an idea whose time has come and gone.
Just look at how Amazon.com has changed the world of brick-and-mortar bookstores such as Borders and Barnes & Noble, or how Zoom is tearing down how monster corporations run their businesses.
Where do you think the people who work for those Industrial Age employers will be in 10 years?
People aren’t losing their jobs — jobs and companies are disappearing.
I’m glad I listened to my rich dad and became an entrepreneur rather than the employee my poor dad wanted me to be. Most people today realize that knowledge is doubling every 18 months. Does that mean that we now become obsolete every 18 months? Maybe so.
Personally, it makes me feel like I need to assign an expiration date to my ideas and update them regularly.
Much of my company’s revenue comes from the web, even though I remain a technophobe. My company survives because I’ve learned to respect the ideas of people younger than me and recognize when my wisdom is obsolete.
While people my age think of investing as an action done in the stock market, or real estate or gold, the reality is crypto investing may be where we need to get educated in and start understanding.
With that understanding comes the search for a teacher. One of my teachers is Jeff Wang. What makes Jeff unique is his understanding of Bitcoins and other coins, but also his understanding of the underlying technology.
What a crazy year and especially crazy first month of 2021, with a flurry of continued mixed news for crypto. We saw Bitcoin break through its all-time highs past $29k.
The narrative has changed from the world currency to inflation against the dollar. We’re at the point of maximum media attention, fund exposure, retail investor hype. These are all signals that we’re near the last phase of the bull run and in need of a reality check.
That being said, I’ve never been more bullish on crypto. The problem with investing, however, is that most assets take into consideration future value, and building a valuation model around Bitcoin and other crypto assets is next to impossible when they’ve all surpassed price projections.
Before we move forward, I just want to mention – don’t sleep on Ethereum. While Bitcoin is up 288% this past year and is stealing all the attention, Ethereum is actually up 460% in the same time period and has a few more catalysts ahead.
In short, if you buy Bitcoin, you’re hedging against the dollar. If you buy Ethereum, you’re investing into blockchain technology shifting to real world utility.
Crypto will become more relevant as fewer investments become available
With bonds and interest rates at historic lows, residential real estate growing at the fastest pace in 6 years, stock markets at all-time highs, there’s really not many places to earn yield on money right now.
Crypto is taking a lot of the spotlight for that very reason. When everyone is looking for 3% (historic bond yield) or 9% (historic S&P 500 yield), crypto is up 300%. This is only going to cause more people and financial institutions to add crypto to their portfolios as FinTech companies open up more and more accessibility to getting it.
Add on to that, with more regulatory authorities stepping in, crypto will only become more mainstream. Bitcoin might be in the news now, but soon we’ll see other crypto projects appearing in mainstream news regularly.
To my generation the idea of Bitcoin and cryptocurrencies is scary. It does not make sense to us. We ask ourselves, “How can money be made out of thin air? What is digital money?”
Not understanding something is not an excuse to ignore it. It is a reason to get educated. Cryptocurrencies are not going away. The investment opportunities are not going away. Jeff has explained to me that the crypto universe is slowing melding with the stock market. Cryptocurrencies are about to get the ability to be traded like stock options. What does this mean?
Cryptocurrencies will be able to make the educated investor profit when they go up in value, down in value or simply stay even. Once again, financial education is the key. And in this situation, an investor needs to get cryptocurrency education. That is why I speak to Jeff Wand and other cryptocurrency experts.
Ignoring the future is an old man’s game. It is time we not only look at the opportunities the younger generation create but take the time to understand them.
Editor, Rich Dad Poor Dad Daily