What if you have invested a thousand dollars in cryptocurrencies around five years ago,
that's not that long ago, a year before the 2017 crash. How much your thousand dollars
would worth today? A thousand dollars in bitcoin in 2016 would
worth around $148K. That is an insane rate of return. Stock market investors can't even
dream about that kind of return. How about Ethereum? How much would a 1K dollar invested
in Ethereum worth today? $273,716.
Can you imagine that a 5K dollar invested in Ethereum 5 years ago would have turned
you into a millionaire today. That's insane if you ask me.
What could be better than that? I am gonna tell you what is better than that!
Dogecoin?
I can't believe what I am about to tell you because it sounds like a joke because it suppose
to be a joke but its not! Dogecoin has grown so much that 1K dollars invested in 2016 would
have turned to over a million dollars today. Instead of buying that brand new iPhone 7
in 2016, you could have purchased a dogecoin for the same amount of money, and today you
could have called yourself a millionaire. Did your iPhone earn a million dollars since
then? I don't think so?
Let's get back to reality. There is no point in looking back and regretting because it's
life and opportunities come and go. But the fact is, we are in the middle of a technological
revolution that's has the potential not to change the financial system but pretty much
everything else. If in 2017, it seemed impossible, today it seems like we are at that point of
no return, especially when a crypto company finally went public.
Just a year ago, it was impossible to imagine
that we will have a crypto platform going public on the Nasdaq. For a long time, bitcoin
or cryptos were considered this little asset used only for undercover activities. Going
mainstream was something not so easy to imagine, especially since the 2017 crash where a lot
of people lost fortunes investing in bitcoin and stayed pretty much away from it. Coinbase
is America's largest cryptocurrency exchange platform where you can buy, sell different
kinds of cryptocurrencies, but besides that, they offer online wallets, or you can loan
your bitcoin to them and earn interest like you would with USD with traditional banks
and a bunch of other services. But of course, their main source of revenue comes from transaction
fees whenever you buy or sell crypto.
Coinbases stock spiked on the first day to
the point where the company was valued at over 100 billion dollars for a brief moment.
That's a great start for a company that trades such volatile assets as bitcoin.
One of the biggest Coinbase investors is Ark
Invest. Cathie woods, the woman who believes so deeply in Tesla, her prediction that Tesla
would worth trillions once its self-driving technology is ready. She, Also predicts that
it's just the beginning for Coinbase, and it will only grow. No wonder why ARK invested
64 million dollars in Coinbase. Coinbase is making trading bitcoin and other
cryptocurrencies easy and simple. The company has around 56 million "verified users" so
far. If we want bitcoin to be mainstream, it should be easy to use and pass government
regulations. But on the other hand, transaction fees are
a bit too high, which is against what bitcoin was made for initially.
Because the point of bitcoin was to create a decentralized system where everyone can
send or receive money anonymously without the middleman, and Coinbase is literally that
middle man, a bank for cryptos. Even your online wallet is like a bank account.
I am not trying to criticize Coinbase. I am just saying how technology has evolved over
time. Of course, you send your bitcoins from an
online wallet to your cold wallet and keep them safe and secure from online wallets.
We actually made an entire video explaining how to buy bitcoins, how to store them, and
the pros and cons of using an online wallet. And what is the safest way to store your bitcoins?
The link will be in the description.
But you know, what's more fascinating than
that is the fact that Dogecoin soared to a record high by more than 400 percent. I still
can't get my head around it. Literally, what started as a meme is now worth billions of
dollars.
Dogecoin started as a joke, like an internet meme. It was never meant to be anything serious,
but Dogecoin's capitalization crossed 5 billion dollars by the end of January.
Imagine you create a meme, and then that meme turns into 5 billion dollars. That's probably
the most expensive meme in the world. And then the world's richest person keeps twitting
about it till it grows to dozens of billions of dollars, and in the last few days, dogecoin
capitalization crossed 52 billion dollars. Honestly, I am shocked!
It seems so unreal that I just can't believe
it, but whether I like it or not, it doesn't matter. That's what's happening. These are
the facts on the ground. I think the excitement around coin bases IPO
drove so many new investors to buy different kinds of cryptocurrencies that it inflated
the entire market Even more. Even bitcoin is trading at around 64K dollars at the time
f this script.
Whatever is happening to crypto now is definitely not sustainable. We have already talked in
a previous video about why the entire market, including cryptos, will most likely experience
a correction or a crash . Because right now, we are in that situation where trillions are
pumped into the economy, and the fed knows that if it stops pumping so much money into
the economy, the economic machine could stop, and reloading the economy is much more difficult
and expensive than keeping it rolling at the expense of inflation. So the fed is watching
from a side to raise interest rates and stop that inflation whenever it seems like we are
back on track and there is no fear of another covid cases spike.
That doesn't mean that crypto will crash to
zero, and that's the end of bitcoin. The IPO of Coinbase is clear evidence that from now
onwards, crypto will just keep growing, but like any other technology, it's still at its
initial phase. Some enthusiasts think that bitcoin is at its peak, and I disagree with
that, I think we need another 10 or 15 years to see the real fruits of blockchain and cryptocurrencies,
and before that happens, the technology is going to go through a lot of volatility. That
could mean many more crashes, it could mean a lot of more spikes, but as the demand grows,
the trend is definitely going to be upwards.
The fact that there is a limited number of bitcoins, for example, already means that
we can't adjust the supply based on demand. More demand, while there is a limited supply,
means higher prices. That's basic economics.
But the fact that we have so many cryptocurrencies that are coming out and are valued at insane
valuations is similar to what happened back with the internet, where we had websites such
as pets.com that also had insane valuation. Not to say that Dogecoin is going to fail
or anything similar to that. Online time will tell you,
However, often when a small crash happens
to an asset that's not stable, such as cryptocurrencies, they can shake the market pretty hard and
cause a snowball effect where it will scare off investors, and prices will plummet much
more than they should.
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