I’ve personally bought and sold 97 different cryptocurrencies since 2014 which was when I first heard about cryptocurrencies. I bought my first Bitcoin when it was $90 and began investing in Ethereum when it was only $4. Back then there were only around 40 different cryptos out there. Then things went a little bit crazy as Ethereum allowed people to build and create their own cryptocurrencies by piggybacking on the Ethereum network… and that is when the boom happened in 2016 and 2017 with thousands of new crypos flooding the market and spiking the prices..before the market dropped in Jan 2018.
Today, there are a total of 7,619 different cryptocurrencies. Two weeks ago there were 7,300 different cryptocurrencies and two weeks prior to that, there were 6,980. You don’t need to be a rocket scientist to see that there are a lot of cryptocurrencies coming out…at quite a rapid pace!
What actually gives them their value?
There are certain things we need to keep in mind when we consider buying a particular cryptocurrency for the first time. First of all, there are different forms of cryptocurrencies that perform different tasks. I call them the magic 5 and I’ve done videos on these. You can find links to them here.
Out of the magic 5, currency coins are where I like to keep my focus. These are designed with one specific purpose…to provide a viable alternative to the $, £ etc.
Why only currency coins?
After the last recession of 2007–9, I kinda got obsessed with studying financial and investment cycles in-depth and learned that booms and busts are commonplace across different phases of history. They happened as far back as in ancient Greece and Rome and the same has continued over the last 100 years with the great US market crash of 1929, 1981, 1987, 1993, 2000, 2007, and now 2020. These cycles pump markets up until there is a massive boom which is generally followed by a bust followed by a recession.
In some cases, the period of recession (bust) is complimented by hyperinflation that is caused because of a ridiculous amount of currency being thrown into the economy and in order to keep them afloat, causing a massive debasement of the currency. This has happened in the Weimar Republic in the 1920s, in Hungary in the 1940s followed by Zimbabwe in the 2000’s and Venezuela last year!
So what is the debasement of a currency and how does it occur?
Debasing currency — which ultimately leads to its demise — is something that has been going on for millennia.
The ancient Greeks and Romans debased their currencies — which were gold and silver coins — by mixing inferior metals in them by increasing the coinage. The US has been playing the same game since 1933 when it was put on a fractional reserve gold standard and again in 1971 when it was taken off the gold standard..Since we were taken off the gold standard, which meant that a dollar note was meant by an equivalent amount of gold, all banks were given free reign to debase the currency supply as much as they required — we would call it counterfeiting!
The end result of the debasement of a currency as history has shown us ( see examples above) has always resulted in the collapse of an economy and hyperinflation where prices increase tremendously whilst reducing buying power.
There was a time when we were not open to such manipulation of our money which was when we were on the classic gold standard from the 1870s to the 1940s. During this period, there had to be X amount of gold and silver representing the banknotes issued by the banks. They could not create unbacked notes out of thin air as they do now. This meant that inflation did not occur at all during that period…it remained ZERO!!!
What is happening to the global economy at the moment with trillions being created out of nowhere?
The 2008 crisis was caused by currency creation and manipulation of markets. Their solution so to stop the markets crashing further was to conduct “Quantitative Easing” or increase the money supply. They did this in phases and gradually and slowly over the course of over a decade created multiple trillions to put in the system and save companies.
Today, they are not taking their time at all… they are creating trillions of dollars in the space of weeks and using them to plug the massive holes in the economy…which are not helping…so..they chucked trillions more!
Now the Federal Reserve and other central banks have said that effectively, their checkbooks are open and they will throw “Whatever It Takes” in the economy.
The end result of these changes is going to be devastating and billions of people around the planet will be affected as most people save in currency and we have a global economy so when the US$ tanks, so will their currencies.
Scarcity Is The Key…And Why Crypto Can Offer A Solution…
Certain cryptocurrencies, particularly ones that have a limited supply amount in the protocol will prove to be winners here.
Take Bitcoin for example. The protocol (programming language) says that only 21 M of Bitcoins can be in existence….ever! As of today,18m Bitcoins have already been created or mined as they are called. When this hits 21m, the prices are likely to skyrocket due to scarcity. There are other coins that followed Bitcoins lead by implementing a “Scarcity Protocol” into their programming language.
When considering buying any cryptocurrencies, we must consider does it provide scarcity, in the sense that they cant be created out of thin air, or are they open to manipulation by debasement. This is key. I like to call these types of cryptos, “Bitcoin and friends”.
This is where we need to be!
There is no doubt that the world is in a very fragile state, both in terms of global health and wealth. There is a serious financial crisis on the horizon with institutions such as the IMF and World Bank telling people to brace themselves for the worst economic disaster in history.
Are you prepared?
We are moving into the age of digital everything including our money and it is so important that we all begin to educate ourselves on exactly how to maneuver around the new economy of the future.
Bitcoin & friends will be playing a pivotal role in this.
If you want to participate and thrive in the new digital currency world, I have got a masterclass for you. There is some life-changing information there which also covers the mistakes I’ve made so you don’t have to.
Its called The Safest Way On The Planet To Buy Bitcoin
Click here for immediate access