2018 – The Year of Financial Bubbles

Cryptocurrencies have been a prominent theme around the world and have shown that our current paradigm of how we handle money and wealth can be challenged. Besides all the regulatory issues which only play at national level, blockchains have shown they will live further on their own without any authority being able to compromise them. Huge volatility is a result of this completely new territory, people see there is something different but cannot completely grasp it yet, often resulting in mania or a lot of anxiety. This emotional cycle is the way a market progresses and we can see the from micro to marco scale, time will eventually stabilize things before entering a new phase and repeating itself again.

The reason why I’m addressing cryptocurrencies (bitcoin/altcoins) is because they have had a lot of exposure and are being called bubbles. A bubble does not mean something does not have any value, this is a huge misconception and most people get scared in the media with a lot of fear when they see this word. A bubble is when reality and imagination are far apart, the expectations and the actual (current) practicability/productivity are then far out proportion because of misunderstanding or euphoria. Once the objectivity or data of what is plausible settles there is a huge pullback and this is when a “bubble” pops.

Now the media uses bubble repeatedly on bitcoin             and cryptocurrencies but we are probably (intentionally) overlooking one of the largest bubbles currently playing, which is the “everything bubble”.
Some examples are Wallstreet, NASDAQ, S&P 500             which represent way more money than cryptocurrencies even resemble. They have seen unprecedented growth and this is very likely coming to an end.
Technical analysis shows that we are at the verge of reversal, there could be some small growth short-term but long-term we are facing some major correction. Could the “bubble” media theme which addresses cryptocurrencies have finally popped the stock market bubble too? Making people realize that money can as easily be liquidated as it grows.

I don’t have much pleasure calling the bubble of bubbles but it might soon become a reality. Once these larger corrections settle in people will slowly enter disbelieve and economies will start to shrink, more unemployment as a result. I think the tech bubble is also slowly starting to contract, personally I see people using less and less social media, both for privacy reasons and disinterest. Personal things tend to be shared in direct circles but commercial advertising is still growing on social platforms while many businesses compete online, sometimes pushing people away.

What areas do I expect to grow?
Since wealth will flow back to individuals, we could see more focus on the individual investments instead of corporate and stocks.
The priority of primary needs will play a increasing role, sustainable/independent living and having resources is important in an area of uncertainty and will always be something that enables us to fall back on something while our own economies are failing. A good example is Venezuela’s hyperinflation, where the majority of families were not able to afford food anymore. Now this all sounds a bit extreme at first, we won’t be at the brink of complete global collapse, but we should definitely realize there are these real-life scenario’s playing. Only because they are far away doesn’t mean they won’t affect us.

2018 might be the year of larger sustainable adoption, solar for example, enabling independent generation of electricity could see a larger boom. If you understand that focusing on primary needs is important you see why.
Gold             and silver             , oil             , food, could all see an increasing demand while people will have a greater demand for physical goods than virtual assets.

Good luck all, take care and don’t forget to plan long-term too.

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