Some discouragements...

 

Hi there ,

Great bull market going on,  new records every minute. BTC, its over 9999! (some dragon ball reference)

Lets think about the real value of any crypto currency. 

What is it , why do we need it, what do we do with it and what does it represent ? 

Here is some inspiration for this post

- BTC Expained !  (whole series , but you get the idea from first episode) 

- Warren Buffett: Bitcoin Is An Asset That Creates Nothing

Here is the counter argument : 

- Chamath Palihapitiya : Buffet is Wrong 

There has been 2 years since these talk , again the crypto market is shining with incredible growth rates. The perspectives maybe changed a little bit with DEFI , and more possible usages with 5G etc , overall the idea seems the same. 

I tend to think that by buying the coin or alt coin , you invest in the project getting valuable. Is there a real correlation and value of these coins ? 

Maybe BNB is a good example , BNB coin is already in 100% circulation meaning all the coin are already mined - ie its a limited resource. Does it really support the business project ? I would argue it is somewhat correlated but no direct link. The value is what other peoples give to it. Where is the demand coming from and why? The only explanation  the demand for other alt coin, BNB being the biggest exchange broker the use of the BNB, buy-in's could be the reason - but you can also buy BTC directly , why BNB then ? What do we do with BNB? In Buffet's words it is non-productive asset and I can't seem to find an real sound explanation, okay you can invest in smaller coin , ICO maybe even we use it in the real world in coming years but who knows... Maybe Binance will bankrupt - will the coin also valued to 0 ? What do we do with BNB? In Buffet's words it is non-productive , and finally if no one wants to buy this from me later - what will the value of it be?  Maybe worth to try to find out coins that are correlated with project performance directly this way the growth of project could be directly reflected to into investor  

Palihapitiya 's perspective seem to logical - maybe as another commodity or a replacement for gold (BTC - not really the alt coins). It could be used for alternative non-correlated hedge , which could add to your portfolios diversification , and lower the risk (?!?)