2. What else smells of opportunity? Bitcoin [BTC] is also looking mighty tempting on a long time frame. I had lunch with a couple of mates yesterday. We posed a hypothetical question: Go back 10 years; what did you want to own? The responses were immediate: bitcoin or Amazon. The notable part was not that those two sprung to mind, but that the entry price or volatility of both didn’t really jump out as important. You had to buy and hold on, letting all the macro and micro concerns wash through. It’s a white-knuckle road when you’re talking serious money. We posed a second hypothetical question: What’s more important over the next five years? Self-driving cars? Renewable energy? Biotech? The rise of crypto? At a moment like that, you fall back to see what’s most predictable. To me, that’s the ongoing rise of cryptos. Therefore, you deduce from that wherein the crypto space seems most secure. That’s bitcoin because it’s the most trusted network. For sure, other cryptos will outperform it over the next five years. But whether you can find that one and have the foresight and guts to take a meaningful stake and hold it is the tricky part. Bitcoin becomes the default fallback under this scenario. Does this guarantee it will succeed, or that line of thinking will be right? No way. However, we can say, or at least I think so, that as far as crypto goes then we are in the equivalent of 1997 and the internet. That is to say, the whole thing is just beginning. Lots of people pooh-poohed the internet at the time. Their comments look laughable now, but back then earnest people took them seriously. We know there are two major problems with human nature when it comes to the markets. One is that we are terrible at predicting the future. Few in 1997 could imagine the iPhone because the tech wasn’t there for it yet. But we humans also overweigh recent events. So bitcoin has had a big drop lately. That induces fear and concern. But bitcoin has had lots of big drops over its lifetime. It’s survived regardless. In five years, no one will even remember this price action. It will either be higher, one would think, or obsolete. But we can assume that crypto will still be with us. Indeed, much of the economy will be tokenised and operating on blockchains in different ways. If that future sounds as exciting to you as it does to me, make sure you hear what my friend Ryan Dinse has to say on the sector by going here. Regards, Callum Newman,
Editor, The Daily Reckoning Australia | 