Hmmm….so let’s see, this amazing new technology that could very well displace capital markets is this good and you want me to cautiously invest 5% into it while I leave the rest of the 95% of my assets in this carcass of a beast you call the stock market?
The stock market is not a carcass. Stocks may be overvalued at the moment but why would anyone think buying a piece of a business was dead as a concept after the introduction of cryptocurrencies?
The stock market is a carcass because the valuations of businesses in the market are for the most part inflated to unrealistic levels. Now how they got there is a result of the fed's loose monetary policies which have done nothing other than inflate the USD and provide the illusion of value. It is a 'wealth effect' that is non existent. You want to buy a piece of a business that is not profitable and trading at a PE of 25? As soon as interest rates move up, which is another serious problem the Fed has, the stock market will see red across the board, and those business will lose value quite fast. Value which they never had to begin with.
Valuations of businesses are inflated and few have room for explosive growth. But aren't loose monetary policies of central banks all over the world affecting the valuations of cryptocurrencies, too?
Only insofar as people are realizing that Fiat currencies aren't able to hold their value and therefore people move from Fiat into crypto. But we are so far away from any type of crypto inflation as adoption and use cases are just starting. It's is the start of Bitcoin, and keep in mind crypto and Bitcoin in specific has built in anti inflation me hanism through restricted supply, so any type of 'inflation would be the result of demand and not an increase in supply, there's a big difference between the two.
You can buy almost nothing with crypto at this stage. You will be in deep trouble if you try to survive without touching fiat.
What I'm talking about is crypto valuation in terms of fiat being inflated just like the stock prices because of the very light monetary policies of most large central banks. Cryptos are assets, not money. They're being hoarded and not spent. Those are the facts on the ground now.
Nobody said not to touch Fiat, until adoption and fungibility are widespread, Fiat will have it's use. Cryptos are being hoarded because they are a better store of value, period. Once adoption and fungibility come along they will be used just like Fiat, and they are indeed a currency, the public has yet to see and accept that, those who are hoarding it are aware of that. That is why they are happy to exchange Fiat for crypto.