I Am Becoming Cynical on Crypto's Future

Whenever I talk about cryptocurrency I always make sure to make one thing very clear to my readers.

My aim is never to dismiss nor disqualify cryptocurrency as a viable "product" or transactional tool, nor to outright speak out against cryptocurrency as something worthy of investing in.

I am very observational guy, and I am cynical in nature due to the analytical aspect of my brain, for whatever that is worth. At the same time, I have been an investor for many years, I understand money, I understand economics and currency, and all of this "experience" is what helps me to have a perspective.

In other words, I am simply sharing what I observe and what I perceive from those observations. As with any investment I have ever made, there is no emotional attachment to it. I am in it to make money. It's that simple, and it is pretty much my only consideration.

What will this investment do to increase my financial position? It is the primary question for me when making any investment decision.

So, when it comes to cryptocurrency specifically, because it essentially has no "product," what I have to deeply evaluate is its "use case." It is the only thing that will ever give any value to the underlying currencies in the crypto space.

So far, I am not seeing much at all in terms of a "use case."

Yes, there are certain countries that are taking on some cryptocurrency and making it an official currency, and in some areas of the world being able to spend cryptocurrency is becoming easier.

But ultimately if we are looking at it with an honest eye, it is still much easier to spend fiat than it is to spend cryptocurrency. It also seems to me that cryptocurrency is largely impractical as a primary source of use at all. Why? Because it is far more volatile than any other currency with few exceptions.

I mean, consider that with rampant inflation how everyone is touting cryptocurrency as a hedge against it, yet at the same time crypto is down 30%-50%, a far steeper decline in value than most fiat. If crypto were the only currency to spend in your wallet, you'd be slammed against the wall trying to pay for anything.

What brings me, in part, to this discussion is a recent notice I received from Celsius, essentially a staking account, that informed me that as a U.S. user, based on U.S. regulatory considerations, future deposits into my account will not earn rewards.

The U.S. regulatory considerations part is key in my analysis. Because while it may not mean anything overall, it is just one more piece that is solidifying a growing cynicism from me that crypto has any real future value.

Words that are often used to describe cryptocurrency are words like "freedom, security, autonomy, anonymity" and others. None of which actually seem to me to apply to it at all.

Governments can very much still control and regulate all functions of cryptocurrency, and can still decide to outright ban it if they want. While anyone can say, "Ultimately it's my wallet and they can't track it or touch it," I think that is both naive and false.

Governments can essentially make it illegal to hold, trade, or conduct commerce with cryptocurrency if they decide to for whatever reason.

Beyond that, until big corporations, and even major investors begin to see a real value to cryptocurrency either as a means of collecting on business transactions, or as a viable addition to their own balance sheets—it is worthless.

If I cannot personally earn from it, spend it, or otherwise qualify a "value" to having it, then to me it is worthless.

As well, once governments begin to regulate cryptocurrency as it appears is happening in the United States, the largest economy in the world, it becomes more apparent that crypto cannot and will not be able to deliver on any of its promises and allow me to operate financially in a way that is significantly different from or better than what I can currently do with fiat.

It will not be an immediate decision for me, but with the recent major dip and things I see beginning to develop, I will likely reduce my crypto position by 50% in the coming months.

I am just lacking confidence that crypto has any lasting value. In the 12 or 13 years it has been around it just seems to be struggling to actually accomplish any of its goals and is still only a tiny fraction of the overall world economy.

At this pace it seems clear that if there was ever a "mass adoption," which is what crypto needs in order to be "real," the possibility of that happening—if it ever happens at all—might be decades away.

There is one other element here, from an investor's perspective, that strikes me. A good product sells itself. If crypto has to work as hard as it does to convince people that it is a good product...

Then it is probably not a good product.

Shouting from the hilltops that crypto is better than fiat is fine. But if people cannot be convinced by proof of that, or proof of a use case, all of those shouts will fall on deaf ears.

A product is only ever successful when it works, and when people can see it works, and when there is no denying that it does work.

In other words, a good product with a solid use case doesn't require shouting from the hills to get people to believe in it. A good product attracts its own audience, and the "use case" comes not from what is promised or offered by the product, but by one's ability to clearly see it.

Again, I am not saying that crypto is dead and absolutely has no future. What I am saying is that if it really is all it says it is, its story should speak for itself. In all my years of investing there is one thing I know for sure.

A product that cannot sell itself never survives. It is certainly something I am taking into consideration when it comes to cryptocurrency. If it has to struggle this hard to make its case, is there actually a case to be made? It shouldn't be this hard is what I am saying.

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