As the continued rise of a galaxy of different cryptocurrencies that coexist alongside fiat currencies distributed by governments shows, money is not what it used to be. Of course, when it comes to purchasing goods and services in the real world, there’s no substitute for cash, so your primary means of exchanging value won’t disappear.
But there are many reasons to believe that in the near future, just a few years from now, you will have a much broader idea of what money really is compared to how you think about it today. Let’s discuss three of the cryptocurrencies that are emblematic of these changes so that you are ready to anticipate.
1.Bitcoin
With BitcoinIt is (BTC 0.17%) With the reputation of being “digital gold” quickly consolidating, it’s the perfect example of how the idea of money as a form of storing value is evolving to be more fluid and less tied to physical objects.
Most people view physical gold as a store of value. In addition to being shiny, rare, and requiring effort to mine and refine, as a metal it is useful in many applications, including producing important items like smartphones as well as more frivolous items like jewelry . It also has a very long history and is considered valuable in many different cultures and eras, hence its reputation for preserving purchasing power over time.
The world market capitalization for gold, at the current market price of around $2,751 per ounce, it is around $18.4 trillion. Currently, the market capitalization of Bitcoin is around $2.1 trillion.
Now look at this graph:
Bitcoin Price data by Y Charts
Do you see where this is going?
Bitcoin’s market cap will likely tip with gold at some point, and it could become much larger. This does not mean that gold will lose all its value. This simply means that the greater convenience of Bitcoin as a store of value is going to lead to higher demand.
The goal here is not to sell gold. This is to buy Bitcoin because it will eventually grow more slowly, like the price of gold, and store value for longer term purposes rather than increasing it like a more portfolio investment. typical.
2. Solana
Solana (GROUND 2.03%) also has a lot to teach investors about what happens to money. The chain is useful for everything from decentralized finance (DeFi) to coinage non-fungible tokens (NFT)speculating on meme coins and interacting with other blockchains through bridging services.
Thus, it is useful as a means of transfer between parties, as a means of storing value, and it can also be spent directly to gain utility in various ways. These characteristics are mostly shared with those of traditional currencies, notably gold. But there is more than that.
By investing in meme coins, Solana holders send a signal to the market about ideas (memes) that they believe will be more valuable – more widespread and accepted – in the future. This information, at least so far, is mostly frivolous, but that doesn’t mean it always will be.
Additionally, holders may also use Solana meme coins to signal their own identity and affiliations to others; after all, people probably don’t want to invest in meme coins that represent values that conflict with their own. It’s a whole new addition to the concept of what money is, and it’s starting to flourish right now.
Buying Solana is a decent way to gain upside exposure to this trend.
3. Dogecoin
Dogecoin (DOGE 0.24%) is the last example that describes a possible future of money. While on a superficial level, Dogecoin is simply the first coin to succeed, there are profound implications for its continued survival.
For most people, there’s not much fun in holding dollar bills in your wallet or cash in your investment account. Most of the fun value of money comes from its ability to give you things and experiences that you enjoy. And while it may seem fun to get a big return on a speculative investment, more and more people tend to feel nauseated by volatility or the high risk of suffering a loss.
But if you’ve spoken to a Dogecoin investor recently, you may glimpse the idea that money can be inherently fun. At the same time, there is the possibility of a significant windfall (or loss). Creating or consuming silly memes about Dogecoin just doesn’t seem very invigorating unless you have a vested financial interest in the price rising. But if you have a lot of DOGE tokens in your wallet, it can be very entertaining in ways that seem inexplicable to those who aren’t invested.
In essence, Dogecoin is proof that in the near future, the concept of money could be seen to imply the possibility of creating pleasure via investment, mediated by the potential for large gains. In other words, expect the simple act of holding money as well as choices about where to invest to become inherently more emotionally charged than they already are.
Takeaway meals? Those who can control their emotions and focus on the long term will benefit.