Why I'm Bullish on Crypto

I've been gradually shifting my attention away from crypto and towards broader interests, but I've never been more confident that crypto is here to stay.

Mainstream adoption appears to be within reach by the middle or end of the decade. From Fortnite players experimenting with Reddit's new Ethereum-based cryptocurrency, to rural Africans and Oregonians using a crypto-powered community mesh Internet network, average consumers are starting to get a taste of how crypto might enhance their every day experiences. The fact that Square's Cash App recently saw the majority of its quarterly revenue come from Bitcoin sales is very promising.

Institutional adoption is laying the ground work for massive amounts of capital to start flowing into crypto. Baseline protocol is making it safe and easy for corporations to use public blockchains for business operations. Bakkt is working to facilitate the use of cryptocurrency in payments for every day consumers while providing secure storage of digital assets for institutions. Renowned hedge fund investor Paul Tudor made a splash when he wrote a letter justifying his decision to allocate nearly 2% of his wealth into Bitcoin. Options and futures contracts make it easy for investors who don't want to deal with learning about cryptoassets to gain exposure to the asset class. The 2017/2018 bubble was based on pure hype and speculation and occurred without meaningful participation from institutional investors. The next one will be qualitatively different.

Key technical improvements are being developed at warp speed. Bitcoin's lightning network and sidechains (of the federated and decentralized variety) will greatly increase its utility. The transition to Ethereum 2.0 will be underway soon while state channels, optimistic rollups, and ZK STARKs are delivering major improvements on Ethereum 1.0. This work might seem boring to non-enthusiasts, but it's important. Some of my biggest fears about crypto's future revolve around technical issues: Can this stuff scale? Will Ethereum's transition to proof-of-stake be successful? Can Bitcoin and Ethereum withstand repeated, coordinated attacks from well-funded and sophisticated  attackers?

Crypto plunged along with the stock market back in March but has made a stronger, swifter recovery. On a daily basis I'm bombarded with reasons to be optimistic about the crypto economy, something I can't say about the U.S. economy, at least in the short to mid-term.

I certainly wouldn't invest anything you can't afford to lose in crypto, but I would invest a bit of time into understanding why Bitcoin hasn't died yet. Andreessen Horowitz's recent piece on The Crypto Price-Innovation Cycle and their Crypto Startup School are great places for newcomers to start and veterans to get a refresher.