When everyone says “no” – that’s exactly when it’s a “yes”

By Kim Iskyan

Right now, a lot of people hate cryptocurrencies… even the very idea of them.

Just take a look at a few recent headlines…

"Sell all crypto and abandon all blockchain" - Financial Times

"Bitcoin, the biggest bubble in history, is popping" - Bloomberg

"Bitcoin is the greatest scam in history" - Recode

And it's not just the media…

They say "no"

I was recently at an investment conference in the U.S. that was full of smart, savvy analysts and investors - whose jobs depend on finding compelling investment opportunities with high-return potential. These are the sorts of people who will go to the ends of the earth to find an exciting investment opportunity… and who eat risk for breakfast.

And you know how often bitcoin was mentioned, or how many times crypto assets were discussed? Zero… Null… Goose egg… As many goals that Brazil scored until the 90th minute against Germany in the last World Cup semifinal.

And several weeks before, I spoke on a panel at an investment conference here in Singapore. During my presentation, I asked how many people had invested in bitcoin. In a room of 150 people, just two hands waved back at me. Maybe some members of the audience didn't want to be scoffed at by their peers - bitcoin was down more than 60 percent from its recent highs - so they didn't self-identify. But even so, the total disinterest in cryptos was striking.

Of course, my two recent investment conference experiences, and some dark headlines, don't represent a trend.

But Google agrees with me. Take a look at the graph below from Google Trends.

It shows the search interest for the word "bitcoin" over the past 12 months. As you can see, searches for it peaked in December 2017, during last year's crypto mania. And since the correction began, interest has plummeted. The popularity of bitcoin as a search term is just 12 percent of what it was in late December.

Oscar Wilde, the 19th century Irish author, playwright and poet said, "There is only one thing worse than being talked about, and that is not being talked about." And that's where bitcoin, and crypto assets in general, are now.

Most crypto assets will die… but blockchain is here to stay

Crypto assets are as popular as a fox at a hen party. And most - the vast majority - of crypto assets deserve to die… like most internet companies nearly a quarter of a century ago.

Crypto assets, and blockchain, are at the stage of the internet in 1994. Back then, some people believed the internet was something explosively powerful… and others thought it was a waste of space. Most people didn't really care or notice.

Soon thereafter, anything internet related went through a period of massive speculation (see: Pets.com… and the 1999-2000 internet bubble). That was followed by a massive bust - which is where we are now for crypto assets.

Today, the internet is an essential fabric that weaves together society and civilisation. It's found its way into nearly every realm of life. For the most part, the internet has made the world a more efficient, smarter, richer place.

It wasn't quick or easy. Vast fortunes were created, lost and squandered along the way. Very close to all early internet businesses were terrible ideas that are buried in the big graveyard in the cloud.

But all those people who poo-poohed the internet in 1994 (and plenty of people did)… well, they were wrong. Where the internet has come today, is how I think the evolution of cryptos and the technology behind them, the blockchain, will unfold in the coming years. Maybe bitcoin itself will be a relic of an era, like AOL's modem buzz and greeting. Or maybe it will be Amazon, a victor that's redefining entire industries.

The process will take time. But it's only a question of time before the applications of blockchain will re-script entire industries, and upend our assumptions about technology and its application in everything from medical care to logistics. To our children, talking about the time before blockchain will be as quaint as the notion of needing to be in a certain place, at a certain time, to receive a phone call.

The winners and the losers

If you'd invested in internet companies starting in 1994, you'd probably have lost almost all of your money. The dot com boom decimated many of the companies in the industry.

But with some hard work and luck, you'd have more than made it up if you'd also uncovered the Amazons and Googles and Facebooks - which would have made up for a lot of mistakes along the way.

The life-and-death cycle of crypto assets is far faster than it was for internet companies back then. Most of today's crypto assets won't be around in six months. But the rewards for finding those that will survive - and which have real, sustainable business models - will be enormous.

 

Kim Iskyan
Kim Iskyan is the publisher of Stansberry Churchouse Research, an independent investment research company based in Singapore and Hong Kong that delivers investment insight on Asia and around the world. Kim has nearly 25 years of experience as a stock analyst, hedge fund manager, political risk consultant, and financial commentator in more than half a dozen emerging and frontier markets. He's been quoted in the Economist, The New York Times, the Wall Street Journal, Barron's, and Bloomberg, and has appeared on Fox Business News, China Central Television, and Bloomberg TV, and has written commentary for the Wall Street Journal, Slate.com, Salon, TheStreet.com, breakingviews.com, and other publications. For more of his insights, Click here to sign up to receive the Asia Wealth Investment Daily in your inbox every day, for free.

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