Behold the Cryptocurrency Wars

Behold the Cryptocurrency Wars

What’s your most vivid memory of feeling left behind?

For your editor, it was the sense of dread we felt at the backend of last year during the height of crypto mania.

As every mum and dad investor boarded an express train to a better life, we could only watch on with morbid curiosity.

It’s not that we believed cryptos were a fad. Or that they weren’t a worthwhile investment. In fact, with the odd exception of tulips, you’d be hard-pressed to find a better performing asset in history.

In truth, we just didn’t get it.

What need was there for a digital payment system when we already had one that worked perfectly well? Wallets, ledgers, blockchains…frankly, we couldn’t tell one from the other.

We’ve since come to learn more about cryptos.

About the plans of elites to use cryptocurrency and the blockchain to replace the US dollar as the world reserve currency.

And about why you’ll likely have your very own crypto wallet soon.

Yet this movement is no longer just about speculating on cryptos or making fabled fortunes.

It’s about changing your very understanding of money…and redefining the way in which you engage with the world around you.

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The true importance of crypto mania

In a recent survey of 29,000 people across eight countries, 75% of respondents claimed to have an ‘awareness’ of cryptocurrencies. Conversely, only 50% admitted to knowing what cryptos actually were.

This disparity reveals the true importance of crypto mania: It legitimised cryptocurrencies in the eyes of both young and old.

Yet it also shows that many people cared more about the dollar value of cryptos than the promise of its technology. Rather than seeing it as a ground-breaking movement out to upend the global financial system, many speculators saw it as a way to make a quick buck.

But investing in the latest trend is rife with danger when you’re dealing with the unknown. It’s made all the worse when every investor is falling over themselves to catch the price momentum.

Too much money, not enough cryptos

Consider that the world’s capital base is largely held in the accounts of those aged 50 and over.

Many of them have paid off their homes, seen their nest empty, and are at their peak of their earning power. They’re cash rich, and always on the lookout for high-returning assets. If they’re not already in retirement, they’re approaching it. And with that comes the need for a final payday.

When you combine this massive capital base with an entirely new asset class that, unlike most others, wasn’t overpriced or offering low yields, you get exactly what we saw.

The largest capital pool in history was looking for a home. Is it any surprise that speculators had a field day?

Yes, fortunes were made. But life savings were lost too.

The silver lining in this entire saga is that it brought about a much-needed refocusing in terms of how people look at cryptos. And that’s important.

Cryptos are now seen less as a way to make money fast. And more as a long-term plan to be involved in something that is likely going to be the way we transact in the not-too-distant future.

This is all part of the ongoing legitimisation of cryptos and the move toward a blockchain future.

But what you’ll hear in the mainstream doesn’t even get half the story right.

Far from being a means of decentralisation, you’ll have little control in this brave new world we’re entering.

Governments may not regulate cryptos directly. But blockchain — which enables crypto transactions in the first place — is subject to government control.

After all, blockchain depends on critical infrastructure, including servers, telecommunications networks, the banking system and the power grid.

All of this can be regulated and taxed by governments.

Governments, major corporations, central banks, financial institutions and the IMF will soon be the biggest players in the crypto markets.

And their sights are set squarely on the blockchain.

This is where the biggest opportunities are for smart investors right now.


Jim Rickards Signature

Mat Spasic,
For The Daily Reckoning Australia