Bold claims like this is what make people look like idiots when things turn around.
With experience though, you can tell that people who make bold claims like this were always idiots gambling away their credibility, hoping the 50/50 lands in their favour.
In case you didn't get the reference, the Coinbase commercial entirely consists of comments saying "Crypto is dead" with various timestamps going back ten years, and then ... "Long live crypto".
I'm struggling to find a good analogy to these crypto boom/bust cycles, where the market continues to survive/thrive after the busts. The closest I can come up with is real estate, but there is a core underlying value in real estate in that people need space to live/work/shop/whatever -- so when speculative bubbles burst, there is pretty significant underlying demand. I have a hard time drawing that parallel the crypto. Certainly there are valuable use-cases but the main use-case still seems to be as a speculative investment.
Not an asset class, but I'd draw parallels to Texas Hold 'Em. In 2003, Chris Moneymaker wins $2.5 million at the WSOP as an amateur who qualified through the internet; within a year, everyone is talking about hold 'em, their bankroll strategy, having poker nights with their buddies, how they're playing 12 tables at once online, etc. Culminates in massive mainstream acceptance, ads for Pokerstars running on major networks, and a major plot arc in a James Bond movie. But it turns out that nearly everyone is a loser in online poker; after all, at a 6 person table, only 1 person wins (well, 2nd place usually gets their entry fee back, but still). Very few people become Chris Moneymakers; most just lose a bit of cash, some their life savings.
Look at where hold 'em is now. It still exists, of course, but you don't see poker tournaments broadcast live on ESPN anymore. It's not even a very popular livestreaming category. It definitely went through a boom, then huge bust, and then a slide into... not really irrelevancy, just kind of a continued existence.
IMO, crypto is headed for the same fate. It will still be fun for a subset of people to gamble on altcoins, to pump and dump and run schemes of dubious legality. And just like I wouldn't count out a poker resurgence sometime in the next decade, I wouldn't count out another crypto spike in the future. People never stop loving easy money.
The main factor in the drop of online poker was the USA crackdown on poker sites. It remains wildly popular in jurisdictions where it is still legal and is making a comeback in some US states that have since re-opened it.
I'm in a region where online poker is legal (Canada) and can assure you it's not wildly popular, at least for my own definition of wildly. I've had a lot more conversations with people about crypto than poker in the past 2 years. Worldwide Google Trends matches the US trend of interest in Hold Em being down ~98% since 2004.
People may be underestimating how popular hold em was in the mid-2000s. As another comment in this thread said, it was even more popular than crypto is now, and that's without the extensive use of social media that we have today.
Poker is not even remotely as popular as it was in the mid-00s. Google Trends shows "texas hold em" currently at 1% of its peak in mid-2004, and the more general "poker" at about 14%. It definitely still exists, there are still tournaments, and it's still played by people around the world, but it's not a part of the cultural zeitgeist like it was ~20 years ago.
This is correct - in the '00s everyone was playing online, or playing after work, or knew someone who was playing. It was big - bigger than crypto is even now. It really was a fad that caught people's attention, combined with lax regulations enabling online play - it was a firestorm.
It’s like betting and gambling. The losers keep coming back thinking they can time it correctly this time around. The game is basically putting money in to get it higher, and timing the top. Crypto being largely meaningless in terms of value is a perfect medium for the game.
Since we're just randomly linking unrelated things, FedEx turned their business around after their CEO saved it from bankruptcy at the blackjack table[0].
That's about as useful as pointing to some equally unrelated thing that did turn around. The truth is nobody here knows either way, and if you did you'd be in the process of becoming very wealthy on that knowledge. Let me make a wild guess that you will not actually be putting your money where your mouth is on this?
I mean the end state of crypto isn’t a very positive one. Either it will crash catastrophically or it will slowly fizzle out until the majority of people just forget about it. Either way, at some point virtually nobody will be using it.
If that's the case, that end state will also coincide with government bans, and non-criminals leaving the space. Which will be catastrophic to both crypto's valuations, and to anyone doing business around it.
There wasn't exactly a huge amount of interest in the startup/Wall Street space for building speculative financial instruments around, say, ISIS-issued 5-year bonds.
Speculative assets rarely crash, despite people wanting the drama of it all. If ETH went to $100, enough people would buy it in the hopes it would skyrocket again and make them fabulously wealthy, pushing the price up, but lower than last time, until it cycled back and so on until it fizzles out.
Because it doesn't seem like Crypto is a good inflation hedge. If you're worried about inflation from unwise increases in the fiat money supply, then it seems like you want something with intrinsic value (real estate, other tangible assets, inflation protected bonds, etc), but crypto is the opposite of that. It's too volatile to be an actual currency so what is it exactly other than a purely speculative asset?
Nothing has intrinsic value. All value comes from subjective interpretation of what is valuable.
Assets with a cash flow have something you can calculate by discounting future income. But at what rate? The market rate? Some people have a higher time preference compared to the market rate, while others have a lower one. In any case, that preference is not negative as in the EU. Nobody wants to receive money later instead of now.
"Other tangible assets" are also a risky bet. Oil hit a negative price in 2020. If supply adjusts to demand, prices should go down as technology makes it cheaper and cheaper to produce things.
Even food is subjective. You can eat for optimal health, but few people are doing that, and instead eat much too much meat. Meat requires much more land per gram of protein.
What happens if people stop SUBJECTIVELY choosing branded sugar water? Coca Cola goes down, which is what "value" investor Warren Buffett owns as 6.71% of Berkshire.
Everything is a risky bet and there is always subjectivity involved in prices, but what I mean by "intrinsic value" is that the the asset has so tangible use that is valuable to people directly. Oil has intrinsic value because people can use it to generate electricity. As you say, equities have (theoretically) some cash flow associated with them so you are buying a cut of future profits.
But what is the theoretically correct price of Bitcoin? In some sense it's just like every other asset, the right price is what someone else will pay for it. But what you actually care about is what someone will pay for it 1/5/10 years from now (especially if you plan to use it as a store of value). And how do you even begin to model that?
