I expect the crypto-market to follow a trajectory similar to the Internet Bubble.
Attached is 36 year graph of the NASDAQ.
Crypto will dramatically change the world not just through hype and speculation, but through its revolutionary applications.
But it will take 5-10 years of hard won engineering and trial & error.
Prices will get ahead of value and there will be a rapid run-up and rapid decline.
It many ways the Crypto-Market is Internet 2.0.
Crypto is reimagining the web with a new secure protocol that enables many new decentralized applications.
I expect us to hit the peak in about 2 years with a total market cap 1.5x to 2x bigger than the internet bubble due to inflation, the accelerant of social media and that the world’s global economic infrastructure is 20 years more mature.
This gives a Peak Crypto Total Market Cap Price Target of 10-15 Trillion.
We are currently hovering close to 800 Billion in Market cap.
I think Bitcoin will fall as the #1 most valuable cryptocurrency within the next year to Ripple, Ethereum, Cardano, EOS or IOTA.
Personally I’ve got a fairly diversified portfolio of about 40-50 alt coins. That’s around the number that is recommended for proper diversification for angel investments in startups, which is what all these alt coins effectively are — early stage tech products/companies.
I pick alt-coins using the criteria of an angel investor (market opportunity, team, vision, traction, competition, status quo…with the additional factor of public receptivity due to the hype factor being such a large determinant of returns).
I swing trade a little bit and take profits off the runners and invest it into smaller alt-coins. I added to my cost basis to have around a 10% total portfolio allocation. This portfolio has run up 200-300% in just the last 6 weeks and so is already a much higher total portfolio allocation. I keep the other 90% in a diversified stock portfolio that are mostly options for leverage. I will probably let the crypto portfolio ride to the peak and try to get out somewhere within 20% of the top, rather than rebalancing the crypto portfolio.
I even arbitraged off some new 0% credit cards and a small amount at 20% interest just for fun to see if I could beat the rate — I have.
What’s scary for the whole global financial system is that there are many reports of people taking out a 2nd mortgage on their house to buy Bitcoin. So the crypto bubble bursting will likely be one significant catalyst for the next Global Financial Crisis, especially as the fall from its peak lines up well with timelines for the next recession which will likely become a depression due to all the accelerating negative feedback loops to the downside: The Current Tax Reform Bill being an excessive stimulant in the late stages of a bull market cycle, excessive government debt around the world, Geo-political instability, and stretched stock-market valuations.
When this happens I hope to be sitting pretty with a shiny bag of put options shorting the market.
For now, I’m enjoying riding the euphoria.
The future portends to be highly volatile, my friends.
Stay alert. Stay ready. Be dynamic.
What are your forecasts for the crypto-market compared to my own? And how are you personally positioning your finances?