Capital is flooding back into crypto. Everyone's excited. You’re hate-scrolling through $DOGE “to the moon!” memes and dreaming of untold riches. But before you mortgage your house and YOLO into whatever’s the new hot coin, hold on a second. Remember the last crypto winter? Remember the rug pulls? This certainly feels different, but gut feelings don’t fund our education system.
I'm not saying crypto is dead. Far from it. What I’m not saying is that we should welcome this bull run with open arms and no skepticism whatsoever. History has a tendency to rhyme, and crypto history is a very Manic-Cronic kind of poem.
Hype Over Substance?
Looking to learn from the hype on major projects such as BlockchainFX, Hedera and Sui. They’re the darlings of this latest bull run, promising revolutionary solutions and windfall returns. Let’s face it, how many of us know what’s happening at the underpinning technology level. How many of them are only in them for the hype train, looking for a quick way to get rich?
This reminds me of the dot-com boom. Remember Pets.com? Webvan? Brilliant ideas on paper, supported by ridiculous valuations, and in the end… worthless. The internet changed everything that much is certain, but it created a grand canyon of failed businesses and crushed aspirations. The same could easily happen here. BlockchainFX, Hedera, and Sui may be the future, or they may be the Pets.com of crypto.
Before you invest, ask yourself this: Can I explain this project to my grandmother in a way she'd understand, and would she actually use it? If the answer is anything other than yes, proceed with great caution.
Regulatory Sword of Damocles?
The crypto market continues to function in a regulatory grey area. Governments around the world are still trying to determine the appropriate way to regulate this new asset class. The threat of far-reaching, sudden changes hangs in the air.
Think about it. A large-scale enforcement action from the SEC would rattle the crypto market significantly. A sudden ban from a major economy or an unexpected warning from a major central bank could send the crypto market reeling. Unlike other markets, the crypto market is open around the clock, seven days a week. There’s no closing bell that safeguards you from losses that happen after hours.
This isn't just about government overreach, either. This vacuum of obvious regulatory clarity makes room for fraud and manipulation too. Rug pulls, Ponzi schemes, and insider trading have become prevalent in the crypto world. Until we have a more robust regulatory framework, these risks will remain greatly exaggerated. Would you bet your retirement nest egg in a market governed by a new set of rules every 10 minutes? The possibility of scam abuse is through the roof!
Utility or Just Speculation?
The trouble with the trouble of speculation is that it’s speculative. Period. And anymore it’s not even a dangerous game of art, it’s not even a science or anything of real value.
The most important question to be asking yourself is whether the valuations we’ve seen in a recent context are backed up by true utility. Are these projects solving real-world problems? Are they generating revenue? Or are they just riding the coattails of the speculative frenzy?
Fine, so a few of these projects are working on creating implementations that provide real utility, right. But a lot of them are simply following the fads, making big promises to “disrupt” entire industries while failing to produce anything meaningful. But what they are really selling are dreams and dreams, as any homeowner can tell you, can be extremely costly.
Look beyond the hype. Dig into the fundamentals. Can these projects survive a bear market? Do they have a sustainable business model? Or are they merely counting on the next cohort of investors to undertake the miraculous task of renewing their valuations?
Don't get me wrong: I'm not saying crypto is a scam. But what I am saying is that this bull run feels a like a too good to be true. So before you hop on the AI bandwagon, step back and do your homework. Take a moment to stop and consider whether you are truly investing in value or just running after a rainbow. Your financial future might depend on it.
