Crypto Is Like the Internet in the Late ‘90s
A few years ago, I wrote an article for Banyan Hill titled “Bitcoin: The End of the Beginning.”
It was early 2018. Bitcoin mania had just ended. The crypto bubble had burst.
The financial media was penning obituaries, dismissing crypto like it was another Cabbage Patch Kids or Beanie Babies fad.
But I saw something different.
I knew we were headed for a bear market. That was part of the boom/bust cycle for every new technology.
And it had one of the worst years imaginable.
Bitcoin dropped 85%. Ethereum fell 92%. And some altcoins lost 99% of their value.
The conferences that were sold out in 2017 during the mania were now sparsely attended.
I gave a talk at a fintech conference in San Francisco and greeted the thinning crowd with: “Welcome to Survivor: Crypto Island!”
Prices were down, but Pandora’s box had been opened.
Behind the drop in prices, developers were still building new protocols and configuring lighter, faster blockchains.
Now is when real-world adoption begins to happen.
The Number of Crypto Users Is Growing Exponentially
Crypto is a brand-new asset class. It’s unlike any investment we’ve seen previously.
As I’m writing this, the total crypto market cap is around $2 trillion. That’s about one-fourth of the $7.5 trillion of gold in the world.
The value of stocks is about 50X that. Real estate and bonds are even larger.
Although the total market cap is around the same level as last year, the number of crypto users is growing exponentially.
It doubled in 2020 and 2021. It’s now around 6% of internet users.
Even if the pace slowed by half, there will be over 1 billion people in crypto by the middle of this decade.
At its current rate of adoption, crypto is growing faster than the internet:
The technology is growing even faster than the advent of the smartphone, which now has 6.6 billion users.
With all of this momentum, crypto feels like the internet in the late ‘90s.
Venture capital is raising massive crypto funds. Traditional finance is starting research desks. And new funding rounds for startup cryptocurrencies are announced every day.
But it’s still early. Only 36% of institutional investors currently hold digital assets.
If crypto became just 1% of these portfolios, its total market cap would be $6 trillion.
It’s also attracting some of the smartest engineers from Silicon Valley who leave web companies like Google, Amazon and Apple for the new frontier.
Of course, some of these new protocols will be the next Webvan or Pets.com, while others will become the Amazon and Google of the crypto era.
That’s why I think everyone should have at least a small portion of their portfolio allocated to crypto.
There’s too much potential upside to pass this up.
Editor, Strategic Fortunes
P.S. You can learn more about the latest developments in the crypto space by checking out my Next Wave Crypto Fortunes service.
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My career on Wall Street started while I was in college. I spent a summer interning for Merrill Lynch in the middle of the ‘90s bull market. I was fascinated with trading, and as a result, after college, I joined Salomon Brothers in the famed mortgage bond trading department. Later, I spent time at Citigroup working with credit derivatives. Eventually, I needed to walk away from the excess of Wall Street. That’s when I joined Banyan Hill in 2017. Now I help readers get ahead of the market and build their retirements.