Again (and I can repeat this almost weekly): I don't give financial advice, but the public markets determine the financing of innovations that startups develop, the core of this newsletter. That's why I try to follow the public markets for stocks and crypto.
It is particularly notable that Bitcoin passed through the $65,000 mark again this week, leading many analysts and experts (of which I am certainly not one) to suspect that the altcoin season has begun.
The strange thing is that the huge increases in Dogecoin and Shiba Inu, the big memecoins, were not accompanied by a good week for Ethereum, which remained flat. That leads to a dilemma:
"Recently, Glassnode founders Jan Happel and Yann Allemann, also known as Negentropic on X, revived hopes of an approaching altseason. According to them, the crucial moment could occur when Bitcoin surpasses its previous all-time high (ATH) of $74,000. For now, altcoins are merely hitching a ride on the leading crypto's upward trend, but a shift could be near.
They believe that once this threshold is crossed, the crypto market could experience a general surge. The usual cycle would then begin: “Bitcoin in the lead, followed by Ethereum, then large caps before mid and small caps,” Negentropic specifies. But since May, Bitcoin has made three surges without triggering this famous altcoin season."
In other words, no one understands what is going on, but things are looking good.
Crypto is no longer a fad
From the comments, I understand that crypto is a very polarizing topic. Returns (or losses!) of 20% to 35% per week are only for the investors with strong stomachs. Next month marks the 16th anniversary of Bitcoin's white paper, so we can conclude that it is not a short-lived fad.
If you are reading this newsletter, I assume you are interested in innovation and not too conservative to try new things. My main arguments for at least starting to experiment with crypto with a limited amount are, first, financial sovereignty, the fact that you have complete control over your own assets without the intervention of a bank or broker; and second, protection against inflation, especially with crypto currencies with a guaranteed maximum supply like Bitcoin.
I hate to end this newsletter as some sort of quote from Wikipedia, but I don't want to leave unmentioned that smart contracts in blockchain are similar to Lego bricks in that, as building blocks, they offer infinite possibilities to automate services and processes. Compared to Amazon's AWS, for example, smart contracts offer the same flexibility and scalability within the blockchain, but without a centralized service provider. And instead of users then just lining the pockets of Jeff Bezos and Amazon shareholders, participants in crypto ecosystems share in the profits.
Of course, governments must protect consumers from fraud and money laundering, as I wrote about the problems at Binance in 2022. But it will be interesting in the coming weeks and months to see how Kamala Harris, if elected president, will strike the balance between ensuring investor safety and encouraging innovation.