Disclaimer:
The following post is a personal opinion on the direction of travel of crypto. This is not to be taken or intended as investment advice, I don't purport to be a qualified financial advisor in any way.
The First Dip
I've only been involved in cryptos since May this year and I've lost count of the number of times they've been pumped up and then faced a 'correction'. The first time it happened it was a wild ride and I thought maybe it was just a case of bad luck and bad timing and all I'd have to do is sit tight and ride it out..luckily the correction didn't take too long and prices rebounded within a short space of time and peace and tranquility returned.
The First of Many?!
Now I've been through a few rollercoaster rides since that first one and I've come to terms with the fact that as far as the prices of cryptos are concerned, it seems to be the natural order of things that they surge and retrench with an (increasingly) predictable regularity.
However that got me thinking, does the level of volatility detract from the seriousness with which investors should approach cryptos? If they were an investment with real substance they wouldn't command such uncertainty right? Investors would be confident enough to plough their money into them and leave it there to gestate at a steady rate.
Is the Volatility an Indicator of Underlying Weakness?
I think there's some truth to the notion that a wildly fluctuating price for an asset means that the market isn't taking it seriously yet.
Not necessarily because the market has already made its mind up by and large that there's no real perceived value in it but because it hasn't figured out what that value and potential is yet and whether it's for the long term. This leaves it open to the whims of the speculators who have caught onto the zetigeist and are perhaps leveraging the interest shown in the cryptos by new money flooding in and attempting to time the price surges for a quick profit.
I think if there really was no subsbtance to cryptos, it would've been found before now and we wouldn't have the multi billion dollar market cap we find ourselves with (that's not to say that everything you see on the exchanges is at the same level of worth, there are some which make it easy to distinguish between good and bad and some which might need a little more research).
The way blockchain technology works is SUCH a game changer, SUCH a disruptor ...it's like someone who shouts something obscene VERY LOUDLY in a in a packed room and everyone just freezes, they're not quite sure what just happened and are trying to process it for an appropriate reaction.
I think we're in that 'frozen moment'. We know something momentous is upon us, we're not quite sure how it happened and not quite sure where the situation is going to take us but we know things will probably never be the same again.
The Future
I don't think that FIAT currencies will just implode overnight and suddenly stop being useful.
The death of FIAT will be a long drawn out affair with central banks of various countries trying their very best to prop up the old system with every trick available to them for as long as possible but overlapped with this will be rise of cryptos.
This transitional period where the overlap of the new and old regimes of money will occur is where I believe fortunes will be made. There will come a time when cryptos will be worth many millions of dollars per coin BUT ...you have to ask yourself is that a point where many millions of dollars will be as meaningless as the wheelbarrows worth of paper marks in the early 1900s in Germany when hyperinflation hit hard?
The fortunes will be made in the lead up to that point where the FIAT will still be worth something (but on a downward trend of value). I think people will sell some of that crypto for FIAT and buy up assets, precious metals, houses, classic cars, art etc...assets which will have an intrinsic worth and can act as a store of wealth.
So from owning a few obscure coins on a hardware wallet, some people who will have waited patiently and not been swayed by the fickleness of the markets will have had that stoicism rewarded by translating some of that digital holding to something palpable... a few houses to their name, a store of gold and silver and perhaps even the classic car collection they've always dreamt of having :-)
If you feel this is worth resteeming, please do so!