First of all, people should look at the crypto space from a technology innovation lens, in that way it will be easier to understand.
The idea that you need to accept the “Wall Street“ way of doing things and do not even think about that can be another way of doing things is at best blurry if not dead.
The crypto market is relatively new.
Yes, bitcoin is old but the DeFi (decentralized finance) space is relatively new. DeFi strikes at the heart of the Wall Street financial system and lets people not only imagine how a different financial system can look like but rather seeing being constructed in front of their eyes and being able to use it.
DeFi has a long path to go to match the current financial system, but what DeFi and Crypto space have and the old system will never have is the idea of “build and let be build“.
First of all the crypto space is build with some core principles in mind
- Freedom ( censorship-resistant )
- Privacy ( Anonymity )
- Open-source ( “don’t trust, look for yourself“ / “build and let build“ )
Because is censorship-resistant you have some confidence that the bureaucrats will have a hard time regulating the space.
The open-source building blocks idea accelerates innovation because the competition is insane.
A lot of smart people and talented entrepreneurs are very attracted to this space because of the asymmetry proposition. The rewards are simply too big to ignore.
Because the crypto world it's relatively new and can be accessed by anybody with a smartphone it looks "amateurish".
The "amateurish" image in my opinion comes for the most part from the fact that everybody can access it.
We can draw a parallel observation between crypto coins and the GME stock situation.
What makes GME situation possible? RobinHood and other apps that make it easy for everyone to trade.
Basically, easy access and large adoption will inevitably result in strange situations.
Anomalies are part of the system now and we are not going back, get used to it.
To be clear: I do no encourage anybody to trade or invest if they do not know what they are doing.
Criticism is shifting
Another thing that we can observe is that the criticism for crypto shifts with time. What I observer chronologically over the years:
- No intrinsic value
- Used only for illegal stuff
- Will be banned
- It’s only hype
- It’s too volatile
Over the years we started from “it’s nothing there“ to argue about volatility.
If we are looking at the situation objectively we can observe that the criticisms do not stick.
We also can observe that these criticisms have nothing to do with the technology behind this innovation.
At least one conclusion that I can make is that blockchain technology is here to stay and it will disrupt a lot of financial and technology companies currently in a market-dominating position.
Another let say criticism is,
“People buy crypto because they just want to get rich“
this came every time crypto coins are going in an extended bull market cycle. I do not put it in the list above because for me this is not a real criticism.
As with other investments or trades, it is normal to want to get rich or richer, if you do not think that buying something will increase its value over a period of time then it is not an investment by definition.
“Ok, but people do not understand fully the technology behind these crypto projects“, critics say.
So do you really think that investors in TSLA know how battery technology works?
Some do, some don’t.
It’s the same situation in the crypto market.
The people who make these kinds of criticism are making it because of a status game, not because is a logical consistent criticism. Basically, we can skip these kinds of criticisms.
Like another wave of technology innovation, we will have:
- booms and busts
- solid and scam companies
- looking invincible and failing spectacularly companies
- transformation and adaptation
Real free market at its best.
If you are a trader or investor and this does not make you excited, I do not know what will.
The fight between the legacy “Wall Street“ financial system and the decentralized financial system ( DeFi ) will be epic and the opportunities will be huge.
For these kinds of times traders and investors live for.
Good, rational, emotionless decisions.