As the crypto bull market begins to take shape, the predictions of new tops are making the rounds. This recent one by Misir Mahmudov, the editor at Adaptive Capital, makes a mega bullish fundamental call altogether.
Mahmudov neither shared why he thinks that nor gave any targets. Nevertheless, comparing the total market cap and the growing popularity of altcoins, one might think that the real bubble is yet to occur.
Moreover, this is not the first time for this analysis. Previously, in 2018, Richard Muirhead, a general partner at Fabric Ventures, shared similar views with CNBC. He notes in the interview that the total market capitalization of the 2017 bubble was a lot smaller.
“Several trillion” dollar internet stocks popped during the bubble. Whereas, the total market capitalization of Bitcoin and the total crypto cap at the peak was around $470 and $750 billion, respectively.
It marks a time when Amazon was about 5 years away from going public. The stock gained over 5000% in two years during the bubble.
IF and only if, the above is true then early adopters will be tremendously rewarded in the future. However, for that, digital assets and decentralized applications should go mainstream. Or in case of Bitcoin and some cryptocurrencies alone due to the growing interest as a ‘store of value.’
The electricity based generation with decreasing rewards has build a strong community of suppliers and traders. Moreover, as the supply rate falls over time, continued exponential demand can alone form a bubble in Bitcoin. Mahmudov notes in his blog,
Anyone who spends enough time studying Bitcoin will realize that it will have a considerable net positive effect on our society. Its numerous positive externalities markedly outweigh any associated costs.
ETF Approval Could be a cue?
It was not until 1995, that the internet stocks started going public. Until then venture capitalists and personal investments were the main source of funding.
Now, since Mahmudov’s analogy with the current timeline falls before that period. One might think that ETFs and addition of cryptocurrenices in stock portfolios, pension and mutual funds is the next.
Currently, investment from a few venture capitalists, high-net worth entities and University endowment funds is driving the mainstream institutional investment.
Furthermore, only 1-3% of population of the world currently own or are working on Bitcoin and other cryptocurrencies. Adding more credibility to the future bubble in case of wider adoption.
Last but not least, there was a considerable amount of distribution among the the internet stocks during the 10 years. Almost all of them were not able to recuperate from the downfall. However, there are some which survived the test of time and adoption to break above bubble highs.