I partly agree with you, especially with the idea that history doesn't repeat itself (and if it does, it doesn't in the same way). I agree with you also that the situation now has nothing to do with 2011, for exactly the reasons you give.
However, where I don't agree with you is that cryptocurrencies were just a new mania. In fact, there are not many ways beside a blockchain technology to have private computer money that is independent of a state or a private company, and that you can deal with on your own.
It seems like a natural evolution: from barter to gold to fiat to cryptocurrencies. These are, however, social revolutions, not just technological inventions. Cryptocurrencies are not just technological inventions like the internet or video tapes: they support a social change.
In a globalised economy, it is pretty clear that national state-backed currencies are going to be outdated. We already had a private world currency, which was gold. However, states, wanting to control this, and wanting to manipulate this powerful economic tool, did everything which was in their power to undo the universal and private money that was gold. And yes, gold had many *practical* problems, like theft, the irreversibility of a gold transaction and so on. The practical advantage of (initially gold-backed) government fiat money made that there was a social revolution in the payments. The states used this to scam people and print more fiat than they could back up, and ended up using their government power to make gold illegal as an exchange medium (simply to cover their scam). As long as economies were largely domestic, national fiat currencies were doing OK, and the state was the master of the game.
The military hegemony of the USA after WWII made that it could impose its fiat money as a kind of world currency for a good part of a century.
However, this is now put into question with other economic blocks competing. The US dollar is still a world-recognized currency and this will not disappear soon. The demise of the dollar is not for tomorrow.
However, the banking crisis of 2008, the problem with the Japanese, and the future problems that monetary state intervention is programming, will wear out the trust that people put in state backed fiat - especially when the USA will be just an economic power like others, and not have a world hegonomy anymore. The Euro, which was initially planned to be a non-national and hence much less scammed fiat currency, is having problems exactly because of this with some member states who cannot get rid of the habit of scamming with money. Greece being the prototype example (but that's small beer), but France not playing according to the rules either. The Euro will become a scammed piece of fiat like any other if the southern-Europe states have it their way. Which is a pity, because the Euro was a non-national fiat currency as was never seen anywhere. Giving up national currencies and national fiat hence HAS already happened in Europe. The next step to free private money isn't so far away as one might think.
Gold has become impractical for personal global trade. If states are not to be trusted, and private companies (like banks) are not to be trusted, then it will be time to have the next social change in the means of exchange. From barter to gold to fiat, the next step can hardly be anything else than a cryptocurrency. Will the historical cryptocurrency, being bitcoin, have the advantage of being the first ?
It will not happen overnight, that is for sure. It will take at least decades.
But there aren't many alternatives besides cryptocurrencies if one wants to have a private company and state free global means of exchange. That's the point. I have a hard time imagining that tomorrow, *other* technologies besides a block-chain technology will emerge on which to base a company-free and state free currency. This is why this is not just a hype. Or we will forget for the next century or so any kind of money besides state-based fiat, or it will be a cryptocurrency.
Also, things used as money, need a build-up of trust. It must be around for a long time before it can be used that way seriously. It is why I think that bitcoin is still a major player even though being the first, it has many technological non-idealities. Of all cryptocurrencies, bitcoin being the first, will have still the most trust. Which will not stop other cryptocurrencies from being around and which may have better usage in specific domains. But they will be "backed" by bitcoin I would think, for its historical prevalence.
Someone still has to tell me why history should repeat itself now that price is 100X higher than what it was at the end of the 2011 bear market.
2010-2011 was a very different landscape for bitcoin.
Bitcoin was an obscure experiment very few people knew about and that needed just a little injection of fiat for it to be pump&dumped several orders of magnitude higher.
A large part of the supply was lost due to early miners not realising what these funny tokens could potentially become. So, supply (hence marketcap) was A LOT smaller than what most believed. How could this be any more bullish than that at the time?
That’s just one of the many reasons why bitcoin now is not what it was in 2010-2011.
The psychology was there. Anonymous money (or potentially anonymous) you could buy drugs with, and potentially more (whatever other gimmick you can think of). “When the world will catch up on this thing, it will be a new mania”. That’s what smart money was probably thinking.
Everything was in place for a potentially big bubble/pump&dump.
The real question was: how far can this go and for how long?
Today it looks like smart money and the invisible hand did a good job in trapping people.
Today bitcoin is a cult full of believers that rely on clumsy analogies like the early internet and they try to pump the bitcoin’s price because of that.
They think decentralization is the single most important thing ever and that bitcoin will save the world.
It’s not like they ever cared for decentralization or anything else in the first place, these are just rationalisations in order to get-rich-quick and justify poor decisions and a bad investment.
Either that, or pump an early investment that is not very risky for them but that it is far more risky for the greater fools that are supposed to buy in now and support the scheme.
The idea behind bitcoin’s protocol has potential, but bitcoin’s implementation or the idea that you need a stand-alone new currency for a decentralised ledger to work is simply a bad one and it carries way too many problems for it to continue any further.
Of course bitcoin will not be taken over by titcoin or pandacoin, I’m not pumping no shitcoin here. Simply put, it is very likely that other projects will take what is useful in bitcoin’s underlying technology and discard all the rest (which is a lot of it).
Smart money understands this cultish environment, and in the early days, that’s what they were probably thinking. “If this starts to become a cult, a new paradigm, and random dudes who barely know what an investment is or know how to manage risk start to take for granted that this “will go to the moon”, that’s when we are supposed to bail and GTFO”.
Yes, gents, that’s the anatomy and psychology of a bubble/pump&dump.
And yes, it ain't pretty.
