PROPTECH
Investing in the digital economy
Legitimacy of Cryptocurrencies
Carel de Jager
The perceptions around Cryptocurrencies are generally changing in cycles and are likely to have a long-term uptrend in society ’ s understanding ( and optimism ) about this asset class .
Typically , people would label the crypto phenomenon a scam or criminal enterprise upon first encounter and declare it dead as its inherent volatility causes another price crash and eventually forget about it .
What are Cryptocurrencies ? While everyone has a slightly different narration and understanding of what cryptocurrencies are , Investopedia explains these currencies as a digital or virtual currency that is secured by cryptography . This then makes it nearly impossible to counterfeit or double-spend . Many cryptocurrencies are decentralised networks based on blockchain technology ; a distributed ledger enforced by a disparate network of computers .
The Narrative VS Reality As cryptocurrencies live through another of their normal four-year cycles , and as they make their way back to the dinner table discussions , those who wrote their obituaries will start investigating why they have been wrong and a whole new world will open .
• We have seen these events play out at scale in Wall Street over the last four years . After threatening to fire anyone who mentions the word “ Bitcoin ” for being “ stupid ” in 2017 , the CEO of JP Morgan Bank now has a price target of $ 146 000 for the digital gold .
• Shark Tank celebrity Kevin O ’ Leary previously labelled cryptocurrency “ garbage ” and a “ giant nothing burger ”, but he is now diversifying 3 % of his net worth into Bitcoin .
• Ray Dalio , a famous billionaire American hedge fund manager and author of several books on macroeconomics , has been vocally critical about the magic internet money in the past . However , he , too , recently changed his mind , calling it “ one hell of an invention ”.
Although Warren Buffet and Bill Gates remain cynic , the list of those that changed their mind on the decentralised currency is growing fast .
The Proof Microstrategy was the first public company to buy Bitcoin in August last year , investing
16 MARCH 2021 SA Real Estate Investor Magazine