Thread by @el33th4xor

Crypto is witnessing a watershed moment. For the first time, it is being considered an enduring, fundamentally new asset class by mainstream.

#Bitcoin is leading the rally right now, with new money coming in from funds that allocate a small percent of their holdings to crypto.

This is exactly as predicted. The Paypal announcement and the Square disclosures, for example, are clear indicators of this trend. The stage was set by the economic stimulus packages, in the US and abroad, which first went into stocks, then started looking for alternative assets.

Stocks prices currently bear little resemblance to reasonable estimates of the "future money flows from the economic activities of the underlying companies." In that sense, stocks came to approximate crypto by decoupling from fundamentals, and crypto started looking attractive.

The new money coming into crypto right now is not particularly informed. The "Boomer funds" do not understand the difference between different cryptoassets, their uses, and their economics.

These folks do not know the difference between a hard-capped coin (e.g. $BTC and $AVAX) versus a perpetual mint machine. They have never heard of a "block size." Yhey do not understand the scalability problem. They probably do not even care about decentralization, at first.

They also do not understand the different goals and scope behind coins, e.g. store of value vs peer-to-peer payments vs internet computer vs governance vs digitizing all assets. They have no idea which coins are useful.

So they start at a relatively safe spot, with a brand name everyone can recognize, because we all worked on getting brand recognition for it, namely Bitcoin.

Not financial advice.

I expect this influx to continue well into next year. If the BTC price blows past its previous ATH, putting everyone above water, there's little reason for Bitcoin to stop until it hits $1T market cap at ~$60k/coin.

History repeats. And if history is any indication, the Bitcoin rally will be followed by a rally in other cryptos, especially those with actual use cases. The runup will be followed up by an altcoin rally the likes of which has never been seen before.

If BTC does reach $60k, that's huge, but that's also about a 3-5X event for most people in crypto. The altcoin rally will bring in >100X gains.

None of this is the least bit important when picking coins. What matters is that the systems that are left standing will be those that are technically superior and offer pragmatic features that enable use cases that matter.

Everyone, and I mean everyone, has a catchy slogan and some technical twist. It's trivial to take a protocol from 1999 and put a little blockchain twist. It's also easy to fix a problem that no one has.

What does matter are fundamental contributions to the underlying science and fixes to the big problems -- scalability, flexibility, usability, etc -- coupled with a fully-committed, unified community that will see it through to success.

The next few months are going to be quite an interesting, historical ride.