Happy Feast of Winter Veil!
So it's looking to be an exciting year in the spheres of finance and business, among other avenues of geopolitics, with many interesting things coming to a head that may reach a climax this new year. Cryptocurrency is certainly looking to be one of them.
When the internet came, there was a bloodbath in the stock markets because people had no idea what to make of this thing. Some dude could come along with whatever big wordy talk about how some thing was the greatest and would be so huge on this new "internet." No one had a clue if he was full of BS or not. Optimism made a lot of bets, and pessimism won most of them, vaporware city. However, because the technology underneath the process was in fact solid and a valuable transition, some of the bets won, and today our 'net stocks (FANG Facebook Amazon Netflix Google) are major drivers of the market, to rival big oil - with Amazon for example aggressively poised and making inroads into previously unassailable areas of commerce and dropping once-safe corporations off the board. Millenials killing things, again. Basically investors wound up betting the entire board, with much of it being lost, but a handful of really big wins. When no one knows anything about a new tech field, this to me appears to be the pattern.
Crypto is, to me, nearly the same story unfolding. We have a new technology with game-changing properties, coming into full view of the general public. Not that many people really have much of an idea about the fundamentals, and what will make a particular crypto succeed or fail. People are betting hard on the success of a technology that will more than likely replace banking and fiat currency, eventually. There was a time when most of the information on the planet flowed through fax, telephone and radio communication. Now I believe it is safe to say that the overwhelming majority of information is transmitted over the internet, often with other communications just being piggybacked as a legacy service. This is, I believe, what we will see in the coming years in finance, with the net result being a lack of physical cash and a total world accounting system.
Like the dawn of the internet, we're going to go through a winnowing process with Cryptos, it's already happened a bunch but until some standards reach very wide adoption we'll still see lots of variety and lots of fast movement in valuation. When a couple pieces of information can change opinion enough to shift values in a large way, it shows how starved for info (that is understandable) most investors are.
From what can be seen at this point, BitCoin itself has technological limitations that will prevent it from ever being practical as a payment system for day to day use; it's a proof of concept more than anything else. Other cryptos with faster networks are actually usable at a large scale and at speed, but adoption will take time and there are many competitors; we'll see a lot of losses and gains in trading as this is all sorted out, and I honestly don't believe I'm really qualified to differentiate the technological backend behind many of the better cryptos out there, so it's quite murky.
My strategy for the year is therefore to build value in the computing power required by cryptos to process their networks. There is a large demand for GPU mining power and the GPUs hold substantive resale value and non-mining use. The main bet is in the value of modern computing hardware to the network, which as demonstrated by server farms and data centers, is a substantial value. Some of the proceeds of mining will be invested into various Crypto bets and traded as time allows, while the remainder be held as physical material gold and silver to keep a hard bet on these metals which are presently quite undervalued, and as a hedge against potential failure of technology-based assets in the event of a critical systems failure at a large scale of some kind.
If you're in doubt as to whether or not Crypto will really go anywhere, consider that it does provide a near-perfect accounting system across the world that will keep tabs on the movements of every bit of currency, and while opaque at this time, will be completely transparent in the future with stronger analysis. You will not be able to hide money or evade taxes. Presently we're in a jubilee in which black money from the world over can flow in to a pseudo anonymous form before the technology changes and it's much more transparent and regulated - which is driving the crypto market to the mooooon of course!
Am I crazy? Probably! Please leave me your thoughts, would love to hear feedback :)
TL;DR - Busy year ahead for crypto, similar scenario to dawning of internet, lack of good/provable info or prediction, likely to see a divesting from BTC begin into other crypto for technical reasons, observe significant influx of money being washed before regulatory oversight becomes substantive.