When thinking about the next crash or bear market many people say it wont' be the same next time around as it was in 2017. Some people agree with that sentiment and others disagree with it. I feel very strongly that those who lived through the 2017 bull market shouldn't sweat the next one and here's why.
- First and foremost the biggest reason is crypto isn't an uncertainty. Even though it seemed like in 2017 we had a lot of adoption and some institutions involved, crypto has come a LONG WAY since then. When Bitcoin and crypto crashed in 2017 I literally thought to myself this could be the end of crypto, not that it's going to go away but it likely could never make it back to all time highs. It wasn't a fixture in society like it is today. At this point so many institutions are involved, so many corporations are holding Bitcoin or accepting crypto, it's not just going to fizzle away to the point where were like hey remember that crazy internet money from a couple years ago that's worthless today.
- There's now ways to earn APR and earn passive income with crypto. If you bought crypto back in 2017 and it tanked 90% your just sitting on your losses for 3-4 years waiting for things to come back. Its a total opportunity loss and for many may have made sense to sell out and put that money into something else as opposed to just letting that money sit for years doing nothing just to get back even. Today there's all types of ways to stake, lend, provide liquidity and you can earn passive income with your crypto. This makes it less likely people will sell and more likely people will continue earning an APR and stacking while prices are down.
- Lastly the world has changed and there's not a lot of great alternative investments. The US Government and world Governments are printing insane amounts of money devaluing the dollar, over 40% of all money printed was printed in the last year and Biden seems to want to keep the presses going wasting money further devaluing your money. The whole Gamestop/Robinhood thing highlighted something we all already knew, the markets are rigged against average Joe's. We've all already known this but that situation really highlighted it and stocks are overinflated right now so not a great place to invest. How about real estate investing? Sure prices are skyrocketing but does anyone want to buy at these inflated prices? We've had rents halted and eviction moratoriums for over a year at this point and we keep kicking the can down the road. Currently they're set to expire sometime around Christmas but I guarantee you they'll get extended again as Biden isn't going to want people getting evicted around christmas and in the cold so it's almost certain it will get pushed to fall at which point it will be over 2 years of landlords not collecting rent and not being able to remedy the situation by evicting someone. I'm currently in the process of selling my rental for this very reason and to me real estate isn't that attractive as an investment.
So what does that leave? Crypto. At least crypto can't be controlled by the Government or a central authority. This time around shouldn't be as scary as 2017.