– We got an excellent question on the YouTube channel the other day. The gentleman asked, “Are cryptocurrencies a store of value?” (techno music) And that’s not as crazy of a question as some people think at first, because there are some people who are going to laugh at that
and say of course it’s not. Others will say it absolutely is. And these are the two
perspectives on cryptocurrencies. But the answer is that a cryptocurrency is a store of value more
than the U.S. dollar but less than something
tangible, like gold. Think of it this way, the U.S. dollar has lost well over 95% of its value since the formation of the Federal Reserve back in January 23rd of 1913. And that decline in the
value, purchasing power, of the U.S. dollar is just
continuing to this day. You used to be able to
buy four horseshoes, two penny whistles and a half a pound of asbestos for a few dollars. And now you’d be lucky
to be a used buggy whip. So digital currencies are
a better store of value than a fiat currency, such as the dollar, or any currency in the
world because none of them are backed up by anything
concrete or tangible. However, it’s not as
good of a store of value as say, gold, because
gold truly is limited by nature, by the actual supply of gold. They can’t make more of
it than there already is. The thing is that people say, well, bitcoin, for example, is
limited, there’s only so much. Yes, but if you watch my earlier cryptocurrency cannibal
videos and other videos, the whole point of them,
and the reason we’re able to call the top in cryptocurrencies right at 20 thousand dollars, 19,600 dollars or so, whatever, the reason we were able to do that is because we understood
fragmentation and saturation. And the fragmentation means that there’s only so many bitcoin out there, but there’s also other options. There’s only so many dollars that are going to go into cryptocurrencies. And now a person has a choice of bitcoin or dodgecoin or beercoin or litecoin or peercoin or darkcoin or whatever. That’s fragmentation. And so there’s an unlimited
supply of cryptocurrencies. There’s a limited supply of
individual cryptocurrencies but the supply is absolutely
bottomless, unlike gold. We’re also in a weird
place with cryptocurrencies where they came out of nowhere and then they became huge, and
everybody and their grandma, even people without computers
are trying to figure out how they can buy bitcoin
and cryptocurrencies. And they all moved into that space. And now it’s just a back draft where there’s more people who are going to want to be backing out of it and we’re starting to see
the attrition rate too which I was talking about years ago, where there’s more and more companies that are accepting bitcoin, and now those companies who were accepting bitcoin they say, “Yeah, we’re not
going to do that anymore.” There’s so many problems
whether it’s paperwork and it’s also taxation regulation and just the difficulty of
being able to establish that. A lot of businesses
are going the other way and there’s a backdraft,
there’s an attrition rate against accepting certain cryptocurrencies and that’s just going to get worse, because it basically hit
what I would describe as peak cryptocurrencies, peak bitcoin. As many people that are
going to get involved with bitcoin maxed out, it’s
not going to grow beyond that. It’s only going to go the other way. You’re starting to see that now, where bitcoin prices for the exact, I’m just using bitcoin
as one example of many, but they’re all kind of
treating the same way, prices since the peak
when we called the top within days of the actual top, have been declining and declining and bouncing back a little bit a bit of a dead cat bounce there, but then they’re declining still. Right now they’re around six thousand. Are they going to go under
six thousand per bitcoin? Very, very likely. They
might bounce back off that. Nobody really knows, but long, long term I do believe that they’re
going to be going down to much lower levels from here. And I apologize to people who are real cryptocurrency enthusiasts, I’m not against cryptocurrencies, I’m not against what you guys are saying, I do know that you’re right and you guys are spot on really good people. It’s just that this is a concept which is going to be driven
by mentality of crowds. It’s not going to be driven by technology. It was never driven by technology. It was always a great technology. It’s always going to be
able to change the world. We’ll be using it for our
entire lifetimes, I’m sure. But what really drove all cryptocurrencies was the madness of crowds,
the thoughts of the masses. And that comes and goes, and
it’s right now in a go phase, starting to back off a little bit. People get so mad if they
have the cryptocurrencies and they hope that’s going to help them get their Lamborghini or whatever. But I’m just telling you the way that this is going to play out and the only reason I will know this is because it’s been played out
over and over and over again for as long as you can look back and as long as you can
look into the future. Find me five people who are members of Occupy Wall Street right now. There’s your answer about what’s going to happen with bitcoin. It won’t disappear ever, and
if most of them do disappear bitcoin will always still be around because it is the bellwether and it is the leading cryptocurrency it represents the concept, even if its not the most effective or the best technology or the best cryptocurrency out there, it will always have a
place, just like Kleenex will always be the number one tissue. And I would suggest, in my opinion, is to wait for a capitulation
point with cryptocurrencies. When everybody and their grandma wants nothing to do with cryptocurrencies when somebody mentions
bitcoin to someone else and you hear the person laughing and waving it off or whatever, everyone is just treating it
like this is just a crazy time that came and went and no one ever went near cryptocurrencies again. That’s when, in my
opinion, is the best time to start buying again to get
ready for the next one up. I think that’s when you
get involved with bitcoin when nobody even takes
it seriously anymore. Capitulation is one of the best times to buy anything in the stock market or even in the speculative
world of cryptocurrencies.