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Obligatory Disclaimer: I am NOT a financial advisor, and none of this advice should be taken without speaking to a qualified professional first. Further, do NOT invest more than you’re willing to lose, and do your own research first.
The mainstream media is in love with the headline “So-and-So Investor Says Crypto is a Bubble!” You see it everywhere.
I, on the other hand, have written several articles on why I believe the opposite is true. However, as a mental exercise, I like to think about which tokens would be left standing should the bubble actually bust.
I’m not alone in this weird exercise — Daniel Jeffries has written on the subject as well, saying that something like 10% of the current crypto-companies out there stand a chance of outlasting whatever bubble burst may come.
The 10% of projects that make it through the bloodbath will turn into the Amazon, Google and Facebook of tomorrow and likely even the JP Morgan and Goldman Sachs as well, not to mention maybe even the governments of the future, like digital direct democracies or liquid democracies.
Before we dive into my opinion on the matter, let me make a caveat:
I believe the so-called “crypto-bubble” is unlike anything we’ve ever seen, including the Dot Com Bubble and the Tulip Bubble, and when/if it bursts, it will not behave in a way legacy or crypto investors will expect. I can’t predict the future, but I know that crypto is different. And I’m not alone in that opinion.
All that being said, my three picks to survive the “Crypto Crash” are Bitcoin, Decred, and Monero. Let’s break these down individually.
Bitcoin — the “store of value”
Bitcoin has been around for nine years — an eternity in crypto-time. It’s been through hell and back several times, including a few forks in the not-so-recent past.
A lot of the problems surrounding Bitcoin come from members of the community wanting to meet scaling demands by forcing Bitcoin to remain a currency. Without getting technical, it seems best to me if we just let Bitcoin remain what it has become: a long-term store of value.
Many big names in the space disagree here, but in my mind, Bitcoin will come to replace things like a 401k, or an traditional investment account . It will be something that you gradually put money into and expect a decent return from years down the road.
If this is actually the case, I believe we should stop trying to force Bitcoin to be a currency. That may be Satoshi’s original vision, but it may also be that Satoshi didn’t foresee such scalability problems nine years down the road (and if you’re reading this, Satoshi…please forgive my blasphemy).
Letting Bitcoin be the store of value most people are using it for today opens the door for another survivor after the “Crypto Crash.” This type of currency would need to have low fees and be lightning fast, which brings us to my next pick.
Decred — “savings and checking”
Fully decentralized, Decred makes changes to the system by the vote of the entire community. There is no centralized miner coalition that can fork the chain whenever they feel like it. The community truly makes the decisions, and this makes Decred stand out.
Further, Decred is implementing the Lightning Network, making it extremely fast, and it has low fees. In short, this survivor slot is the “I’d buy a cup of coffee with this token” slot.
I do acknowledge that there are several alternatives for this survivor slot, most notably, in my opinion, Litecoin. However, being a fork of Bitcoin, I believe most people will opt for a day-to-day currency that is different enough from Bitcoin to be distinguishable. And Decred isn’t just a checking account with which to purchase coffee and groceries — it comes with a “savings account” too, through their Proof-of-Stake system.
By saving up your Decred and staking, you earn a fixed amount of “interest” much like you would in a traditional savings account. Except with Decred, you’re making significantly more than you would with a bank.
So far, I’ve said Bitcoin will survive the “Crypto Crash” because people will need it for long-term investments, and a token like Decred will survive for practical everyday use. That leads us to my last survivor pick.
Monero — “safe, secure, and anonymous”
The third aspect of financial life, in my opinion, is security. There are transactions that necessitate anonymity for a variety of reasons that aren’t illicit.
Perhaps one government wishes to transact with another without the entire world knowing, or perhaps one business wishes to make a purchase from another business that isn’t public yet. Or perhaps further security is needed between parties due to legal concerns.
Whatever the reason, I believe at least one token will survive the “Crypto Crash” that focuses specifically on anonymity. Most likely, it will be used primarily for transactions and not to store value or make everyday purchases.
3b
It’s worth noting that Ethereum isn’t on this list. None of this is to say that Ethereum can’t or won’t survive a crypto bubble burst. However, I wanted to boil this list down to only three essential tokens, and ETH didn’t quite make the cut.
I love (and currently hodl) Ethereum, and I think it will be huge in the long term. But if a crash happens, I expect it and all ERC20 tokens to take a huge hit as many of these tokens represent underdeveloped (or nonexistent) tech.
Don’t let the possibility of the “Crypto Crash” keep you out of crypto.
Is cryptocurrency in a bubble today? Will it come crashing down and ruin the economy? Maybe. Is anyone in the financial world actually able to see the future in order to know when or if the crash will occur? Absolutely not.
There is too much to be learned and too much profit to made from the incredible innovation that is cryptocurrency for you to be sitting on the sidelines. Put some skin into the game! Do your own research and invest in a token that helps you reach your goals in life.
The further involved you become with this community, the more you’ll understand how different it is from anything the financial world has ever seen. That won’t take away the risk of the “Crypto Crash,” but it will give you opportunities you won’t find anywhere else. And to me, that’s worth it.
If you haven’t invested in Bitcoin yet and you want to join the movement, the easiest way to begin is with Coinbase. Get $10 of free Bitcoin when you use this link — it’s my referral link — and get started now!
If you’d like to start using an exchange instead of Coinbase, Binance is a great place to start. Sign up here!