Crypto is on shaky ground. Bitcoin is down about 50% this year, Ether 70%-and hardcore believers are panic-selling. One has to wonder about the future of digital currencies. Chris Dixon said those who doubt crypto are taking too myopic of a view. A crypto-evangelist, Chris is a prominent figure in Silicon Valley. He is General Partner at Andreessen Horowitz Venture Capital. At the beginning of the year, he seemed to be doing well with his proselytizing, but now it's all crashing down. Last week, Bitcoin reached its lowest point in 18 months — at just above $17,800 —and Ethereum is worth about a quarter of its November peak.
"To look at the history of the internet and tech, there are two tracks: a financial track and a product and tech track," Dixon told host Kara Swisher. The financial track has been "this crazy uncle that's jumping up and down," he said. "I thought last year was too high. I think this year, it's too low. But it seems wildly volatile to me in a way that doesn't fully make sense." He said, "it should be viewed separately from the product and tech track," instead of saying, "it should be through the long lens of history." "Blockchain is history in the making," he said. "There has been a new computing wave approximately every 10 to 15 years since World War II. And for each of those, I spent a lot of time thinking about this and reading its history- each wave had an incubation period." But, "I don't think that we should throw the baby out with the bathwater," he said. "I think that core technology is critical." “Web3, combining the best features of the open, decentralized protocols of Web1 with the advanced modern functionality of Web2, has the potential to render powerless the handful of giants that control the web and put that power in the hands of users," Dixon said. He added: "I believe Web3 and crypto are the only disruptive technologies in the world right now that can take down these empires and rebuild them."
I agree with Dixon. Just because we have had a few bad weeks is no reason to throw away everything that is so promising about crypto and Web3. This is still only the beginning. All of us are still early to the game. Volatility attracts traders looking for profits, but it can be nerve-wracking for new investors. Prices spike and crash almost as quickly, while rumors, sentiment, and fundamental developments are rapidly factoring into the market. As new cryptocurrencies emerge, and others fall by the wayside, traders can expect plenty more of this volatility in the future. What investors should be doing if they want to stay on top is simply managing their risk. Never invest more than you are willing to lose. I am not winding down my crypto investments but just getting started. I am not slowing down my study of what is going on. I am increasing it.