Let’s Recap Tech Stocks After 2000 (Opinion)

Last year saw the fall of the Terra-Luna ecosystem, BlockFi, Celsius, Voyager Digital, 3AC and Alameda-FTX. But it is not the end of cryptocurrencies. Like the internet after the Dot Com bankruptcy, crypto is still getting started.

Sure, it’s true that several crypto companies went out of business in 2022. But it looks worse in the headlines than it is in reality. Critics of cryptocurrency in news journalism and the traditional financial industry are treating the failure stories as representative of the entire industry.

The cryptocurrency community likes to use the term “FUD” to describe the proliferation of negative crypto news. In a way, that’s natural and understandable in terms of surveillance, transparency, and threat detection.

Fud is an acronym to describe crypto news articles or social media posts that add to perceptions and feelings of fear, uncertainty, and doubt. While the FUD can start discussions on Twitter or YouTube and increase participation, it rarely reports on recent threats and weaknesses.

Instead, it typically over-analyzes them and creates a bias so that participants in these discussions give them more weight in their view of the industry and markets. Also, all the FUD does not tell anyone about the great products that the cryptocurrency industry is building.

Crypto critics continue to inspire doubt

At this point, it is hard to question the inevitability of cryptocurrencies for anyone who is aware of the facts about cryptocurrencies and the latest techniques and products of the global financial market.

Take as an example, this recent story in The Politico about the attitude towards cryptocurrencies in Davos. He says:

Scaramucci is one of a host of crypto-addicts — executives and staff from high-profile exchanges, brokers, and tech companies — who are here in this Swiss ski resort town to try to convince investors and potential backers that, despite the near-total collapse of the industry this fall, all is well.”

These words just don’t make sense, “almost complete collapse”, that’s exactly right. The crypto industry did not come close to completely crashing last fall. Another company in the cryptocurrency industry, a start-up in an innovative tech space, went out of business.

The internet never stopped growing after the dot-com crash

More cryptocurrency and altcoin businesses will fail in the cryptocurrency industry in the future. That doesn’t make blockchain any different from any other sector of the economy. Also, the price of Bitcoin and altcoins experienced a deep correction in 2022. But the context is that it was after an equally steep bull run through November 2021.

But the production of crypto networks during the crypto winter of 2022 did not come close to complete collapse. They didn’t fail. They didn’t even hesitate. Bitcoin hashrate and difficulty kept going up through the crypto winter. Network miners continue to find a new block on average every ten minutes and fulfill transaction orders from addresses.

Activity on the Bitcoin network remained strong. New daily active BTC addresses were the image of healthy use of the digital platform on a global scale. The most popular altcoin, Ethereum (ETH), saw the same strong growth in network usage and engagement.

Therefore, it is simply misleading to say that the cryptocurrency industry almost completely collapsed in 2022. It may be that many people with only a superficial understanding of cryptocurrency think that this is what really happened.

But cryptocurrencies didn’t all but disappear in the past year, and they’re not a “favorite rock” either, as JP Morgan’s Jamie Dimon puts it. recently mocked.

draw a comparison

Future Crypto fortunes look today like those of the internet in the year 2000. Even after several dot com stocks crashed and burned in a widely discussed media spectacle. The parallels are almost disturbing.

In 1999, the Internet received the same kind of criticism in the media that Crypto has today. They said it was a passing fad. They complained that it was too clunky and difficult to use. The public, at first, regarded the Internet as a good toy for computer nerds.

But they didn’t see its potential to connect the entire world. Nor do they see today the expected future value of organizing that global connection to make it fairer and more secure.

Most people didn’t invest in “tech stocks” even after each and every business started keeping the internet at their fingertips 24/7 about a decade after the collapse of the dot com.

In the year 2000, pieces of fud were flying all over the internet. They said it was a place for scams, phishing, and hype businesses that didn’t actually produce anything. Not that what they were talking about was entirely false.

They were reporting facts, but not really to efficiently classify them and put them in their larger context to leave their audiences better informed.

From failure to shaping the world

The newspapers caused a little public panic over the Y2K bug as if it were going to be the end of the internet.

Today they use the Internet for their circulation. But the same organizations used to mock the internet in giant folded pieces of paper delivered to people’s homes by truck.

Many investments made in a late 1990s economy, full of capital and low-interest financing, at the height of the dot-com mania, were ill-advised. They got burned when the stock market corrected.

But it wasn’t really hard to spot some of the Internet companies that would win in the next two decades. Some dot coms had customers and revenue. Others had a dot com website, with some photos and their email address, but no customers or sales.

Amazon, for example, was a highly publicized Internet success story when the Internet was new. It has a strong business model and founder. This dot com made more books available to its customers than any other bookstore in the world. They then shipped your order right to your doorstep and took great care of your customers.

AMZN worth just $1,000, purchased at $18 a share at its initial public offering in 1997, had a market value of more than $2 million in 2021. That was just over two decades later.

Many cryptocurrencies have already scaled like this in much less time than Amazon stock.

A ton of developer interest in the 2020s is in Crypto

Young developers in 1999 wanted to create dot com websites and video games. In the late 2000s, everyone wanted to create mobile apps and video games.

In the late 2010s, everyone wanted to create cryptocurrencies and DeFi applications (and video games).

Really talented computer science students, creative entrepreneurs, and savvy venture capitalists are all excited. about cryptocurrencies today the way that same type of business people were on the Internet twenty years ago.

The rise of the digital network itself created a global connection revolution. Which was characterized by the ability to make digital copies of so many things. Plus, digital computer copies were super instant, super fast to ship around the world, and it was all very affordable.

There was an avalanche of digital abundance.

Cryptocurrency is the next step in that connection revolution. Blockchain is an industry that supports the global computer network by reliably producing digital scarcity and securing it for its owners.