The Crypto Bubble
Growth of Cryptocurrencies
We've all heard of Bitcoin, one of the oldest cryptocurrencies first emerging in '09, although it is by no means the only cryptocurrency. Bitcoin can be useful to track the growth of the cryptocurrency market, as there is only a slight deviation between Bitcoin's growth and the growth of the entire market.
Abeer ElBahrawy at City University tracked crypto's growth from Mid-2013 to Mid-2017.
An important thing he noted in his research is that for the most part, the market treated all cryptos the same, with no real preference for one currency over the other. Granted he published this nearly 2 years ago now, and I believe that has changed. I myself am not a huge crypto trader, preferring to stick to more traditional investment vehicles, although friends of mine are making cases for Ethereum and Ripple. (Let's not talk about Petro)
On the other hand, even the crypto creators are envisioning a ceiling for the growth of cryptocurrencies. The creator of Ethereum spoke at a conference over the weekend with a very important line ending his presentation.
The times of 1000x growth are over
Troubles in Crypto
A major reason for approaching the ceiling for Bitcoin is that everybody and their mother has heard of it, so the only growth opportunities for the currency are finding applicable uses.
Goldman Sach's new CEO, David Solomon, is a cryptocurrency enthusiast, and will be opening up a trading desk soon.
We are clearing some futures around bitcoin, but it's going very cautiously
It's not all rosy however, with the SEC on a tear to regulate cryptocurrencies. The SEC suspended the trading of two Crypto trackers, CXBTF and CETHF, tracking Bitcoin and Ethereum respectively.
Cryptocurrencies have also seen backlash for its decentralized nature. With Nobel Prize-winning economist Joseph Stiglitz saying:
Bitcoin is successful only because of its potential for circumvention, lack of oversight
Several renowned economists have predicted a bubble existing in the cryptocurrency market. Richard Thaler likens the irrationality of the crypto market to the tech and real estate bubbles in the past few decades. As Crypto is up and out people are looking elsewhere for the next booming industry.
Growth of Weed
Crypto traders are flocking to the booming cannabis industry following the crypto trade bust. The FOMO is real amongst them as they do not want to miss the cannabis rally.
Many investors who were part of the crypto boom are jumping ship to cannabis, especially recently as crypto's had a historically bad run . At the same time, I've noticed prices in the cannabis industry, at least on the TSX and CSE, have been being bid up at a ridiculously fast rate over the past week. I believe it is reasonable to conclude that many investors are moving from crypto to cannabis.
Bunch of Canadian Stoners
My guy JT has set in motion plans to legalize marijuana for recreational use on October 17th of this year. As a result of that, Canadian weed companies have soared through the roof, especially since the Ontario government announced they would be purchasing marijuana from OVER 90 RETAILERS.
Weed's here to stay, crypto seems like it's on its way out unless better use cases can be found for it. I don't believe we will see the 1000x snowballing in the cannabis industry like we did with cryptos, however there is definitely more room for growth. Especially as more countries look to legalize the drug for recreational uses.
What do you guys think? Is Kush the new girl on the block?