Yesterday, the cryptosphere neared $40 billion with over $1.5 billion in volume for the day with bitcoin leading the pack with over $750 million in volume. Early adopters will still remember the day when the bitcoin hitting $750 million in market cap was just a dream and now that\u2019s the volume of bitcoin in one day. Meanwhile, the entire cryptosphere saw a volume of over $1.5 billion and this is an industry that didn\u2019t even exist a decade ago.<\/p>\n
Ether and Dash Join Bitcoin: Mint Millionaires<\/p>\n
Bitcoin minted the first round of millionaires as a crypto-token. This year, Dash and Ether have joined bitcoin, minting millionaires with graphs showing uptrends since their projects started. If they continue to innovate, they may remain as serious players in the cryptosphere. Meanwhile, we\u2019re beginning to see the evolution of ideas expand \u2013 like dot com stocks helped create the rise of other related industries, we\u2019re beginning to ideas unrelated to tokens in the cryptosphere. For instance, BHP Billiton is using Ether for its supply chain. In general, blockchain technology will disrupt the commodity industry, among many others.<\/p>\n
Keep in mind that this is a new industry that\u2019s just starting and most people have no idea what bitcoin, a crypto-token, or the cryptosphere even is. As these projects innovate, they will know what all of those are. For the time being, I fully expect we\u2019ll see a correction from this overall high value; timing tops is not something I\u2019m interested in, so where this round will end remains to be seen, but velocity is slowing.<\/p>\n
Global Wealth
\nThe cryptosphere makes up a total of 0.00019% of global wealth at the time of this writing, which means we aren\u2019t even close to 1% of global wealth. I view that number growing as more people discover other ideas where this technology can be applied \u2013 and will be applied. For now, one could argue that we may see a limit of $100-300 billion over the next few years with the current set of ideas, until other applications are discovered.<\/p>\n
If the industry as a whole continues to innovate, make itself relevant as new challenges appear, and leverages existing ideas and new technology, the cryptosphere as an industry may grow into the trillions. Ether, Factom and a few other projects have caught significant attention, as people have begun to see their potential and are willing to work with them.<\/p>\n
Cryptosphere Expectations
\nAs I type this, over 1,000 ideas exist and some of these ideas have become crowded \u2013 such as the cryptocurrency space, with new cryptocurrencies even though these have been overdone. I fully expect that the top projects will eventually command 80-90% of the total market cap. For the time being, we should expect people to debate what these top projects are and like the top companies of any industry, I fully expect these will change in time too.<\/p>\n
Bubbles Validate Good Ideas
\nBitcoin has validated Austrian economics, though I find it humorous that some of the beneficiaries of this want the industry regulated in the name of \u201cpreventing bubbles\u201d, which will harm the industry (Mick Mulvaney agrees with me here). Bubbles happen whether you want them to or not, but the price of quality projects after a correction is still higher than when the bubble began. You can be wise like Vitalik Buterin and see this, or you can be ignorant like Wired and fail to see this reality. A correction destroys bad ideas, bad projects, and deceptive innovation; Americans would be extremely wealthy now if they let the S&P 500 experience a correction \u2013 which companies could survive? Which new companies would enter? Yet, Americans think stability is great, when several corrections would flush out the bad while creating room for the good with the index hovering at over 5,000 right now (if they allowed corrections).<\/p>\n
Bubbles raise awareness, but they also flush out the incompetent. Prosperity destroys fools and a bubble makes people feel prosperous. Only the people who don\u2019t trust prosperity and success survive: they were the ones from day one who were focused on their vision, not on the distraction of success. This is why I welcome bubbles and in the end, the quality projects (like the quality companies) will always reset at a higher price after the correction than their price before the bubble began.<\/p>\n
Never forget that bitcoin\u2019s most spectacular bubble \u2013 the 2011 bubble \u2013 saw a rise of bitcoin from less than $1 to over $32 with bitcoin experiencing a 93% drop in price, yet still above $1. Bitcoin never fell below $1 again and today bitcoin is over $1000. That is the power of allowing extreme prosperity so that we can all see who\u2019s using it the best and who\u2019s really fake, because when the chips fall \u2013 and they will \u2013 no faker can hide.<\/p>\n
The Time To Leave
\nLast year, I created the course Retire Early With Cryptocurrencies and the material has been right on the money. Like many early industries, the students have won. As the industry evolves, obtaining disproportionate results becomes harder, since everything regresses to a mean. Still, I think we have some time and I think people are only on the tip of the iceberg when it comes to ideas \u2013 I can think of many ideas that people have missed for now, so there\u2019s more room for growth.<\/p>\n