1/ Primer on the value proposition of bitcoin & decentralized finance (aka ‘DeFi’).
In my opinion, this will continue to be one of the most exciting growth sectors over the next decade...resulting in a complete paradigm shift toward sound money, new financial products & web 3.0.
In my opinion, this will continue to be one of the most exciting growth sectors over the next decade...resulting in a complete paradigm shift toward sound money, new financial products & web 3.0.
2/ First, let us dismiss the popular myth that bitcoin is transient like the speculative bubbles of tulip mania and south sea company.
Those bubbles were very illiquid and lasted a short 3-4 yrs.
Bitcoin has been growing for over a decade with billions of dollars traded daily.
Those bubbles were very illiquid and lasted a short 3-4 yrs.
Bitcoin has been growing for over a decade with billions of dollars traded daily.
3/ Bitcoin is an incredibly unique asset...
An asset resistant to inflation, capped at 21 million coins.
An asset resistant to censorship/seizure that can be privately secured with a seed phrase.
An asset that can be transferred anywhere in the world almost instantly.
An asset resistant to inflation, capped at 21 million coins.
An asset resistant to censorship/seizure that can be privately secured with a seed phrase.
An asset that can be transferred anywhere in the world almost instantly.
4/ Unlike its digital currency predecessors E-gold (1996) and Liberty Reserve (2006) that were swiftly shut down by the US gov't, bitcoin continues to thrive 12 years after its creation.
The reason: Decentralization
E-gold and Liberty Reserve depended on centralized issuers.
The reason: Decentralization
E-gold and Liberty Reserve depended on centralized issuers.
5/ Bitcoin does not have a central point of failure.
Instead of a central issuer, the bitcoin network is maintained by millions of specialized computers (ASICs) and thousands of nodes distributed globally.
No one person, corporation or government can interfere with the network.
Instead of a central issuer, the bitcoin network is maintained by millions of specialized computers (ASICs) and thousands of nodes distributed globally.
No one person, corporation or government can interfere with the network.
6/ Yet I frequently hear the comment “the gov't will shutdown crypto once it’s on their radar!”
I’ve got news for you. Crypto has been on their radar for years.
Obama in 2016 indirectly alluded to the danger of crypto as equivalent to a “Swiss bank account in [your] pocket.”
I’ve got news for you. Crypto has been on their radar for years.
Obama in 2016 indirectly alluded to the danger of crypto as equivalent to a “Swiss bank account in [your] pocket.”
7/ Trump specifically addressed bitcoin in 2019 in an attempt to refute concern that the US dollar was in trouble.
***Side note, since Trump's comment below in mid-2019, there has been over $10 TRILLION in stimulus injections/bailouts.***
***Side note, since Trump's comment below in mid-2019, there has been over $10 TRILLION in stimulus injections/bailouts.***
8/ For my last remark on the gov't 'banning bitcoin'...
The cryptocurrency market cap today is over $1 trillion and has been over $1 billion since 2013.
E-gold and Liberty Reserve were shut down before reaching even $1 billion.
Bitcoin is far more resilient than you may think.
The cryptocurrency market cap today is over $1 trillion and has been over $1 billion since 2013.
E-gold and Liberty Reserve were shut down before reaching even $1 billion.
Bitcoin is far more resilient than you may think.
9/ Decentralized finance, commonly referred to as 'DeFi', is the next sector of growth in the rapidly maturing cryptocurrency market.
This is an entire financial market being created outside of banks & stock exchanges, based on smart contracts that execute w/o central authority.
This is an entire financial market being created outside of banks & stock exchanges, based on smart contracts that execute w/o central authority.
10/ With DeFi, you can...
- lend/borrow without banks
- avoid volatility with stablecoins
- trade without centralized apps such as robinhood or e*trade
DeFi makes it possible for only you and hardened code to have complete control of your money.
This is just the beginning.
- lend/borrow without banks
- avoid volatility with stablecoins
- trade without centralized apps such as robinhood or e*trade
DeFi makes it possible for only you and hardened code to have complete control of your money.
This is just the beginning.
11/ While DeFi has flown under the radar of mainstream media, general public AND institutional investors, the space is growing at an unprecedented rate.
In just the past year, DeFi has grown from less than $1 billion to almost $30 billion.
In just the past year, DeFi has grown from less than $1 billion to almost $30 billion.
12/ Despite this tremendous growth, DeFi still only captures a tiny 5% of the total cryptocurrency market cap.
It is still very early for one of the most prominent narratives and value propositions in this space.
coingecko.com/en/defi
It is still very early for one of the most prominent narratives and value propositions in this space.
coingecko.com/en/defi
13/ Beyond finance, we are seeing the foundation being built for the next version of the internet—web 3.0.
An internet where control is decentralized, and users have greater autonomy over apps and their data.
An internet where control is decentralized, and users have greater autonomy over apps and their data.
14/ Web 3.0 is still in its infancy, but is desperately needed in a time when big tech routinely/arbitrarily deplatforms users and surreptitiously shares private data w/ 3rd parties.
I suspect web 3.0 will definitively usher in freedom of speech in the digital space within 5 yrs
I suspect web 3.0 will definitively usher in freedom of speech in the digital space within 5 yrs
15/ Lastly, the beauty of this space is the ability to front-run institutional investors/hedge funds.
In equities, early investments are restricted to institutions & accredited investors. Retail must wait until IPO—a time when most gains are already locked in by early investors.
In equities, early investments are restricted to institutions & accredited investors. Retail must wait until IPO—a time when most gains are already locked in by early investors.
16/ For DeFi and web 3.0 projects, retail can invest early via publicly traded tokens.
It just takes research and a vision of the future—both available to everyone.
(Institutions, in many cases, are actually at a disadvantage as they must comply with guidelines & LP contracts.)
It just takes research and a vision of the future—both available to everyone.
(Institutions, in many cases, are actually at a disadvantage as they must comply with guidelines & LP contracts.)
17/ Finally, as a freely traded market inclusive to all, cryptocurrencies will continue to grow in boom & bust cycles.
For those with low-time preference though, the next decade will be a time when money, finance and the internet is re-envisioned.
This is not investment advice.
For those with low-time preference though, the next decade will be a time when money, finance and the internet is re-envisioned.
This is not investment advice.
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