Market Prices at the time of writing:
1 BTC: $28,900 USD
1 ETH: $1,774 USD
For context, I first jumped into the cryptocurrency market in March of 2019 when BTC was $7K and ETH was about $140. I certainly don't need to recap the euphoric rise and subsequent crashes over the last 3 years.
I want to separate the cryptocurrency market as a whole and isolate BTC and ETH. If you would rather not read this and just have the executive summary here, this is the headline: I'm long on BTC and ETH; everything else is speculative. My always-on caveat here is that this not advisement or investment advice as to how to direct your portfolio. This is simply the way that I am thinking about the market.
To be clear, I have very small positions in other alt coins that are not BTC and ETH. All in all, less than $2K of my crypto portfolio is outside of BTC and ETH. This is essentially a betting pool for me, much like Fan Duel or any other betting app. It's a roll of the dice. Sometimes the ivory lands in my favor and sometimes the house pulls my chips from the table. That's the speculative game.
For BTC and ETH, it's a long tail for me and if there is one message that I want to impart, it's this: BELIEF. I wish I was in a stronger cash position right now, because I would be putting as much ETH and BTC in my cart as possible. History might very well prove me wrong and cryptocurrency might just be seen as a flash of irrational exuberance in the rear-view, but that is clearly not my viewpoint.
I joined Interwoven in 1999, three months before an unbelievable IPO and a stock market that was frenzied with every dot-com startup seeing ridiculous valuations (Interwoven included). The history that unfolded is that the thousand of dot-com companies and subsequent overnight multi-millionaires being made was alluring to the broader market to jump in. Then the dot-com crash happened and most of this wealth just evaporated. But clearly, there were winners that came out of this: Apple, Google, Amazon and Facebook. The Subsequent financial crash in 2008 and 2012, Tesla and a handful of others came out as victors. These stocks took their fair share of beatings as well, but ultimately stood the test of time.
The big difference in the above scenario is the tremendous profitability, market execution and consumer dominance that ensued as a part of the larger market forces. In other words, it was not just a financial stock chart dynamic and market cycles that made these companies into the juggernauts they are. They have real products, real customers and real revenue.
What does BTC and ETH offer the larger markets that will justify a massive valuation and worth? These are different value propositions just as Google and Amazon have different go to market strategies. BTC, I believe will be the gold standard for evermore during our lifetime as a the digital asset class and store of value. It's simple and somewhat easy to understand. It is easy to move, transfer and secure as a digital asset. Think about this analogy. There are lots and lots of Internet top level domain extensions. The gold standard is .com. But there are .net, .edu, .org and literally dozens and dozens of others. There is no technical difference in how the other domain extensions work. None. There is no technical advantage in how these others work. The value of .com is undisputed when building a new brand. I believe BTC to be the .com equivalent.
For ETH, it's more complicated and complex. But I will summarize it to be a first mover advantage as a blockchain that supports smart contracts. No matter how much NFT's become valued or devalued over time, NFT's are on the Ethereum blockchain. There are lots of businesses being built on top of the Ethereum blockchain, so I believe it to be a sound digital asset class.
The volatility of the cryptocurrency markets will continue and there will be many more "corrections" to come. My long-tail approach is simply this: accumulation is the name of the game for a ten year play. Hopefully, I will be in some position to take advantage of the down swings and buy opportunities. Even still, my plan is to continue to dollar cost average as much as possible.
Hope this has some inkling of value to your own perspectives.