A Time To Buy?
Good morning, Blockchain Brief. I spent a considerable amount of time over the weekend looking at entry positions on some of the blue chip cryptos. One thing that continued to occupy my mind: these prices, even just a few weeks ago, would have looked like unbelievable bargains. 50%+ off of their all-time highs (up to 80-90% for some altcoins with significant networks).
Then you look at the heavy-handedness of the SEC, FinCEN, and other government regulators and imagine the worst. There is no doubt that the exchanges may be in for some serious trouble, with FinCEN making the claim that ICO developers and exchanges are technically "Money Transmitters"... a license the vast majority of them do not have (notably, I found that CoinBase does indeed have this license in virtually every state). My suspicion is that all US-based exchanges are scrambling to obtain this license, and that the next 90-180 days may force a lack of liquidity as some newcomer cryptos are "de-listed" and some exchanges are forced to shut down.
I know it's bad when my dad, who bought Bitcoin and Ethereum on CoinBase in early January on my suggestion, starts asking me if "this crypto thing is ever coming back from the dead." I know many of you are thinking the same thing.
On the other hand, I spoke with a prominent attorney in the space who let me know that there are various special interest groups -- well-respected organizations -- that plan to challenge the FinCEN guidance directly, and soon. This may result in a softening stance, as has happened before (in South Korea, for example) when government officials collide with the popular will. Additionally, I can feel the tides turning. In Boston, in early 2017, you would be hard pressed to find a couple of great crypto-related events to attend on a weekly basis. My calendar shows a half-dozen events just in the next day or two. (Speaking of which, if you're not attending our dex panel or the MIT Bitcoin Expo, now is the time tore-prioritize!)
The blockchain movement, for it can be described as nothing else, is capturing many of the brightest minds in the technology space. And, at least in the United States, where many yearn for financial freedom and creative expression, I think these smart people will roll right over unfair haters, scammers and jerks. I can't find myself betting against progress.
So is it the right time to buy crypto? To me, the answer is represented by your time horizon. Are you looking to make a quick buck? In that case, head to Twitter and find your favorite technical analysis talking head. Personally, I am skeptical of knees, shoulders, heads and the rest of it when it comes to crypto. The news cycle is just too fast, and I find it more in my personal wheelhouse to stick with the fundamentals. And the fundamentals play out for me, as I see a concerted effort to scale existing blockchains and teams of increasing quality building new ones. The future looks good.
And because of that, I'm in.