Bitcoin & Wall Street: Sneaking In
Bitcoin has now entered the major leagues. Despite the onslaught of critics and naysayers on Wall Street, according to Autonomous Next, Fintech disclosed to CNBC that 124 hedge funds are invested in various crypto assets. That's a bell ringer.
This leads me to think that Wall Street is trying to keep the noise level up – so they can scoop up the lion's share of the opportunities. Am I a just a cynic? Or maybe more of a realist?
However, there are things to consider when weighing in on this, so we need to understand some of that noise. There are hundreds of tokens being launched, and if history has a say in this, there are huge risks to be taken – but also huge rewards to be earned. History rarely get's it wrong – it tends to repeat itself. Most will lose money, and a few will get fabulously wealthy. The key is to get it right, and there are no hard and fast rules.
At this stage, it's a flip of a coin… almost. To keep the record straight, my “money” is on Bitcoin as a survivor. Yes, there probably will be others, perhaps like Richard Branson said, “maybe even better ones”. In my opinion, Bitcoin will survive and thrive.
That said, diversification is very important in all investments. Don't sell your house and buy Bitcoin. I wouldn't. Diversify. The returns could still be incredible in any “winning” asset class.
Statistically, or should I say historically, 84% of tech IPOs between 1997 and 2000 were gone within 10 years. This figure is according to Autonomous Next.
At this stage, everyone in the cryptocurrency world – and in the blockchain technology world – are like cats on a hot tin roof. Since this is technology after all, a small evolution in a single technology can create a new giant – and destroy an existing market leader.
The greatest and perhaps the most important takeaway is that no matter what is being said or forecasted, crypto has not only arrived, but is already being implemented in government and in commerce. So the technology itself is not being disputed. After all, it's been in the development and implementation process for years.
The billion – or trillion dollar question is… “How will blockchain technology ultimately shake out in the financial world?” Every large financial institution and government today, has an enormous technological infrastructure, based on the old system. So resistance will be very strong, but alas, as with all new technologies… ultimately futile.
So pick your horses – not just one. Bitcoin is on my list, but I'm hedging.