What gets me excited about crypto is that every dollar I invest right now could potentially be $10-30 in 2 years. So if I have $50, that could be $500 to $1,000. If I have $100 to invest, that could be $1,000 to $2,000. $10k could be $100k, and so on. I know that stocks are the safer choice for the long-term, but in two years who knows?
I think people are all or nothing on crypto, and I think it’s ok to have a set amount of money that you are willing to bet on it. That number could be $100 to $100k or more depending on the amount of capital you have. But I do think it’s possible to invest in crypto and stocks. Many people seem to have this mindset that you have to fight against crypto and be tribal about stocks, gold, or index funds.
I think it’s of the utmost importance that, if you are going to invest in crypto, you have to understand the crypto market cycles. People always dismiss crypto, and then it goes up, and people then take interest. But then, by the time the masses start buying, they are near the end of the cycle, and then it drops again, and everyone thinks it’s a scam. Like oh, it’s a scam, I lost money. The mindset is, “If it doesn’t work out for me, it must be a scam.”
Could you imagine having that mindset where you’re like, “Oh yeah, I tried driving a vehicle, and I crashed it. It’s a scam.” But if you never took the time to understand how the vehicle works or how to drive it, then you got in without any understanding, got on the road and crashed it, and then you’re like, “Eh.. I don’t think I’ll do that anymore because it’s a scam, you know, the whole driving thing.”
Meanwhile you would be missing out on something many people love, which is the joy of driving on an open highway, listening to music, and just feeling the road beneath you and the beautiful world around you.
Crypto has gone on three 4-year market cycles. Every time we seem to go higher and higher. But the thing is the returns are less every time. For instance, Bitcoin went from $10 to $1,000 in the peak of 2013, then $500 to $20,000 in the peak of 2017, and then in 2020-2021 from $4-6,000 to $69,000. So in 2017, it was a 20x on average, and then in 2021, it was a 10x. A 10x is still amazing, but each time, there are diminishing returns because more and more people are getting in, and the amount of money that it takes to move the markets gets higher and higher.
This image is from: https://coinmarketcap.com/currencies/bitcoin/
You can literally see the writing on the wall that the world’s economies are struggling right now. The reason is because of mismanagement of the money supply. If you look at the value of the dollar over the past 100 years, it’s basically lost 99% of it’s value. That means the dollar is an inflationary asset, because as time goes on, the dollar is worth less and less, because there are more and more dollars printed every year.
This image is from: https://www.visualcapitalist.com/purchasing-power-of-the-u-s-dollar-over-time/
With bitcoin, it is a deflationary asset, as there are only 21 million bitcoin that will ever exist. And unfortunately, some of those bitcoin were lost from people who had them a long time ago and threw their computer away, etc. So as time goes on, and the current monetary systems around the world continue to struggle from mismanagement, more and more people will look to bitcoin as a safe haven from this.
If you watch a show like Mad Men, they were making around $250 on their paychecks, weekly or even biweekly. And that was in a high-level marketing agency. Now, that $250 would be about 1-2 days pay for most jobs. If you held your money in cash since that era, it would have lost almost all of its value over time.
With bitcoin, it has only existed for less than 15 years. However, the price has increased from less than a dollar to over $30,000 each! That is because of this deflationary property.
And all this being said, we are still early in crypto. I think we are just getting to the point of society where most people have heard of bitcoin, but most people also think it’s a scam, Ponzi scheme, or just don’t understand what it is.
We are at the same point of 20 years ago, where the internet was just gaining traction. Facebook had just come out, it was only for college students with a college email address, and social media was just getting started. Fast forward to today, almost every single person who can be on the internet is. The internet dominates every single aspect of today’s society.
Crypto will do for money what the internet did for communication. That is the long-term future that people don’t see.
Bitcoin was created anonymously as a way to help people after the 2008 financial crash. The creator wanted people to have a way to exit the financial system and not rely on government-based currency that is controlled by a Central Bank and loses almost all its value over time.
The US national debt has grown from about $3-6 trillion when I was in high school to over $30 trillion today, and it’s getting worse and worse every year. The government is now in potential of defaulting on its debt, and our government overspends every year.
So if you want to keep putting your faith into the current system and rely on the government to take care of you, that is your right. But if you want to take control of your financial future, self-custody of your crypto is your avenue for that.
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