Was it ever worth it?
Was there all that much to gain?
Well, we knew we’d missed the boat
And we’d already missed the plane
We didn’t read the invite
We just dance at our own wake
All our favorites were a-playing
So we could shake, shake, shake, shake, shake
—Missed the Boat, Modest Mouse (2007)
A recent Gallup poll indicates that 6% of investors are holding or have held bitcoin or some other cryptocurrency—a meaningful uptick from 2% in 2018. Active and sophisticated investors have interpreted the survey—and cryptos’ surging market caps—as evidence that digital currencies are entering the mainstream.
Luckbox readers are out in front of the phenomenon—65% of you have traded or invested in crypto. But that also means a third of you haven’t. This issue is for you.
While Luckbox isn’t prone to pounding the table, we’re urging you to embrace the indisputable reality of cryptocurrency and recognize the genius of the blockchain and inevitability of decentralized finance.
Consider these events of the past month …
In the largest crypto deal to date, the Antigua-based crypto-trading FTX Exchange, led by Sam Bankman-Fried, raised $900 million to value the company at $18 billion. More than 50 private companies, including Coinbase, Solana and OpenSea, have achieved “unicorn” status by earning a valuation exceeding $1 billion.
Some 50% of institutional investors are already allocating funds to crypto, and 70% plan to invest more, according to a recent Fidelity Digital Assets survey.
The price of bitcoin climbed nearly 50% in the month before our press date. Other altcoins have climbed much more. In August, Cardano became the third largest cryptocurrency by market cap, rallying more than 100% in a single month and more than 1,400% in the past year.
Digital insiders are hailing Ethereum’s recent London hard fork (EIP-1559) upgrade as a game changer. By removing ether tokens from circulation, the company rendered its crypto a deflationary asset, increased the value of outstanding coins and dramatically reduced transaction fees.
Skeptics note the volatility of cryptocurrencies, irrational investor exuberance and the absence of a rational valuation model. But they’re missing the point and ignoring their own experience.
During the past two decades we have witnessed the dramatic disruption wrought by digital technology. Radical change has come to media, retailing, manufacturing, housing, healthcare, education, communications and transportation. How can the digital transformation of currency be far behind?
The time has come to determine how, what and when to invest in cryptocurrency. While Bitcoin is the market leader, Ethereum has momentum and Cardano and others look promising. There will be winners and losers.
But the sector itself seems certain to emerge as a winner.
The compelling evidence is right before our eyes. It brings to mind the wisdom of legendary investor Benjamin Graham, who said, “In the short run, the market’s a voting machine, but long-run, it’s a weighing machine.”
Luckbox expects the scale will record new highs for Bitcoin, Ether, Cardano, Solana and others this time next year.
Cast your vote however you choose. But skeptics should take note. Call it a revolution in the exchange of value, the natural outgrowth of technological change or some combination of two, but don’t harbor any doubt that the $100 billion decentralized finance industry will continue to grow prodigiously.
This is not the time for contrarian hunches.
–Jeff Joseph , Editorial Director
–Ed McKinley, Editor in Chief