Today's charts are still a bear trap, btw. Buyer beware.
I think a lot of people can feel like something is about to burst, and they're not wrong. The big question is what's going to be the aftermath of the AI-bubble collapsing because it's basically tied into everything else, including crypto. (It accounts for 40% of statistical growth and like 80% of stock growth in the US, btw, which is insanity.)
People like Buffett will say assets like gold are an inferior investment because it doesn't produce anything - farmland produces crops, stocks produce dividends, but gold? It just kind of sits there. It doesn't even gain interest - it's only worth what you have at any given time, losing to entropy every day.
The same logic could be applied to Bitcoin, which is often considered "digital gold". For seasoned investors, this is not a good thing, for the reasons pointed out above. Gen2 coins "solved" this problem by adding staking rewards (proof of stake) - which is basically the same as interest rates on a currency, which now considered the standard in the industry right now.
As much as I would like to see the Web3 succeed as a whole, I just can't imagine a scenario where proof-of-work can survive long-term, because it's just so inefficient (power usage), inconvenient (specialized hardware for mining), expensive (tx fees are astronomical), slow (block times), and not as secure as people think (in case of war, it would be very easy to target mining farms because of the obvious signals it puts out all the time).
@GridcoinNetwork is the only use-case I can think of that actually provides benefit for all the energy consumed - but most people don't even know about it, and you can't find it on any exchanges, even if you wanted to. (I'm taking a bet on this project right now, btw, full disclosure - I think that after the AI bubble pops and BTC becomes unprofitable a lot of that hardware will be adapted to projects like these.)
But the markets are not always rational - there is still a chance that BTC could do very well in the near-medium term just because the fear of economic collapse would make Bitcoin a fairly appealing destination to be in - for the same reasons as gold. It's what people go to when people are afraid - as Buffett said himself. I don't think it will last, however.
Let's take a look at what the US government did back in the 1930s during the Great Depression in order to "reset" the debt that the government was drowning in at the time, just like today. FDR (a famous leftist - do you see the parallels?) basically mandated a buyback of all the gold assets in the country, often by force, in order to stabilize the currency. Then they arbitrarily changed the price of gold from $20 to $35, "erasing" a major part of the debt that allowed the government to keep its lights on.
The results were controversial, but it did its job in restoring confidence to the economy and it effectively got the US off of the gold standard for good. Here's where the "digital gold" idea for Bitcoin starts to fall apart - for one, there is no way for the government to reprice BTC like they did with gold, because it's an asset with no borders, and no one party in control. The other part is what was just said - that getting off the standard was devastating to the ownership of gold thereafter - after its served its purpose.
Even if all of the things that maxis claim will happen does, it eventually leads to a crash, one way or another. The idea that crypto is a candidate for the new world's global reserve currency has some merit - but when people start taking a serious look at this stuff they're going to find that the technical problems of the coin itself will be too much, especially when there are so many other competitors out there. Some may end up getting rich from playing the right pockets at the right time, but it's going to be a dangerous game to play because it's basically trying to time the markets, but on a grander scale.
Many are predicting that the Chinese Yuan will be the next global reserve, just because they've shown clear signs of growth in the last few years, and unlike the US, they don't go around the world starting wars like we do. And other countries are already switching over for major transactions now, including oil. On the surface, this actually seems like the most logical outcome at this point.
But that won't be an acceptable solution for everyone - and all that money in Bitcoin has to go somewhere. Crypto does have a place in the global markets, if only to keep the USD and Yuan in check. I just don't think it'll be Bitcoin - because it just doesn't have the things the financial system needs right now.
So - that's where the alts come in. And where decentralization and security actually matters (it doesn't matter that much right now, unfortunately) because it needs to be something that is credibly "neutral" as the world scrambles to figure out where to go to next. The ones that have a proven record of reliability will come out ahead - purely out of necessity, rather than hype.
Anyway, that's why I'm in Tezos right now, because it has all of the traits and conditions to survive in an environment of extreme uncertainty. Aside from its very solid governance records, it's also known as the "art chain" in Web3 right now - dealing with the most historically volatile asset in the history of humanity - art. Art is something that people have trouble even defining, but XTZ is somehow making it work. No guarantees of course, but as far as the "race" goes, they are way far ahead, and nobody else gets even close.
I seriously doubt most people are thinking this far ahead - which isn't an easy thing to do these days since we're just being bombarded with a lot of insanity on a daily basis now. But that was the case during the Great Depression, too - and well - history repeats itself and it also rhymes. It's same pattern over and over, from the Roman empire, to the Dutch Franc, to the British Pound. Over and over, and over. This is just the next iteration of that pattern that has been going on since the beginning of time. ⌛