Remember the days when people kept predicting that bitcoin and other crypto-currencies would die?  For those who kept saying they were all ponzi schemes, three recent blows to that assertion recently happened.  They may get the last laugh, but their arguments are losing a lot of value with these recent moves:


### China and Uber

China ruled in favor of apps like Uber.  This was one of the biggest stories I've seen in a while, and it reminded me of China's ruling on bitcoin - they allowed individuals to trade it and kept companies out.  This is a huge blow not only to people who are against crypto-currencies, it's a loss to people who dislike Uber.  Uber represents peer-to-peer transportation and is a jump, hop and a skip away from technology that will make it possible to be completely decentralized.  

China is making a conscious choice to favor innovation over investment and they believe that this will help them solve the future challenges that they'll have.  Whereas the United States and Europe are printing money to keep their markets high, China is allowing their markets to *fail* knowing that this will lead to innovation.  The bet China is making is that innovation will solve the demographic problems they're facing.  Europe, the United States and Japan all face the same demographic problems; only China is bold enough to let innovation solve it.

As a developer in smart contracts, this means that I can target my smart contracts for China since they will be more open to them than other places.  This is a welcome development for both innovators and developers.


### Another Cryptocurrency Hedge Fund

[Another crypto-currency hedge fund starts](http://www.coindesk.com/coinbase-first-employee-hedge-fund/), though this one will be exclusively involved in the tokens behind the scenes.  Carlson-Wee sees where the crypto-currency community is headed, especially with the rise of crypto-assets:

>In interview, Carlson-Wee asserted that, owing to the poor returns shown by VCs so far in the industry, investors are better off investing in bitcoin, ethereum, steem, as well as projects like The DAO.

Written in another way, compare the following returns since 2009:

>**S&P 500**: 149%

>**Bitcoin**: 65,499,000% [1]

From the article, it sounds like Carlson-Wee sees a future where many of these tokens become important in transactions and this is an opportunity to get in early.  We already are hearing talk of more bitcoin ETFs outside of GBTC, but how far away are we from mutual funds and ETFs that may hold a DAO or other crypto-currencies and crypto-assets?  What if a mainstream company decides to do an Index Fund DAO?

Unfortunately, since bitcoin started in 2009 and other crypto-currencies began a few years later, that's our only comparison at this time.  However, this year alone, two popular crypto-currencies jumped over 2000% - Ether and Steem (the latter of which I *currently* think is a Ponzi scheme due to its model it describes in its white paper, but agree with the community that it has numerous ways to monetize its network as it grows, if it chooses to do so).  Additionally, I predict that one of the DAOs will eventually return 100,000% within twenty years like Cisco did during the 90s dotcom boom [2].  Which DAO will have that return?  I have no idea, and I expect many of them will fail, but the concept behind the DAO - as well as the concept behind many of these blockchains - is an idea that I think has a high probability of spectacular success.  *To me, the risk of loss from many failed DAOs is worth the gain of one good DAO*.  Again, many of the DAOs will fail - like the SlockIt DAO failed - so people who can't  handle any loss won't be able to enjoy the one that wins.  Simply put: I only take a chance with something I'm willing to lose and anyone who can't do that, should stay away from everything in the crypto-financial world.


### About Those "Four" Interest Rate Increases in 2016 ...

The Fed didn't raise interest rates again.  This isn't surprising, I *almost correctly* predicted last year that the Fed wouldn't raise interest rates at all (they did once in December) and I predict they won't raise rates this year either.  Still, there were people who believed that the Fed would raise rates *four times* this year.  *Four times!*  How would that have ever been possible?  We are in July with 0 interest rate increases - exactly as I predicted.  If the US economy was as strong as the Fed claims, interest rates would already be at 6%.

Why is this important?  The Fed isn't doing what it says that it will do.  People were surprised this last time because they believed that the Fed would do what it said.  *The irony of this is not lost on me*: while people swear that "bitcoin is a ponzi scheme because nothing backs it up", the intrinsic value of trust continues to shine and the Fed has none while bitcoin's system is built on trust (a 21 million permanent cap and network that verifies transactions).  You think a system with integrity and trust is a ponzi scheme, while you put your faith in an institution that constantly goes back on what it says?  

<center><img src="https://media.giphy.com/media/Fml0fgAxVx1eM/giphy.gif"></center>

In a negative and low interest rate world, crypto-currencies and crypto-assets along with gold, silver and miners *only* make sense in my mind (see below image of leveraged miners versus the S&P 500).  There's a strong probability that I'll be wrong, as there generally is, but I don't see many things performing well in this world that increases the standard of living overall.

<center><img src="https://www.anony.ws/i/2016/07/30/spvleveragedminers.png"></center>

**Disclosure:** I own shares of the DigixDAO and I currently have multiple buy orders in for more shares ([an example of why](http://www.ibtimes.co.uk/digixglobalsecuresdeal-silverbullion-safe-house-singapore-1572491)).  I also owned shares of the SlockIt DAO (it failed).  I own numerous crypto-currencies and assets, such as - but not limited to - bitcoin, dash, litecoin, ether, ethic, counterparty, steem, rise, shadowcoin, etc.  I also own many mining shares across multiple mainstream markets.  In one of my [upcoming videos](http://skl.sh/2aPHrtq), I briefly discuss my methodology for *value investing* in crypto-currencies and crypto-assets.  As Benjamin Graham would warn though, the only guarantee in any investing is failure; success *sometimes* happens.

<p>[1] <b>Note:</b> a cost basis for bitcoin of $0.00 cannot be used to calculate a return since division by zero is impossible.  Since many early bitcoinaires received free bitcoins (it averaged $0.05 in price in 2009, and was below $1 many times), this calculation is only including the people who got in at the early prices by paying, not getting in free.</p>
<p>[2] Cisco returned 102,000% in the 1990s dotcom boom.</p>