Blockchain technology that places a premium on privacy is currently trading at a substantial discount. There are so many bullish tailwinds in play for privacy coins that it’s hard to believe that the market cap for a premier privacy-based cryptocurrency like Monero sits at just over $4.5 Billion.
This isn’t going to be the article to thoroughly detail the tech and cryptographic nuances behind Monero and privacy coins in general. Check here and here if you are interested in furthering your understanding.
While there are other privacy coins on the market, Monero is generally regarded as the industry standard due to factors like default anonymity (as opposed to Dash and Z-Cash which have optional anonymity) and an uncrackable privacy code.
Here are 5 reasons Monero currently has serious upside potential:
- The current VPN (Virtual Private Network) industry is valued at about $31 Billion. It is estimated nearly 1/3 internet users worldwide use a VPN. That’s a lot of people that would presumably value privacy for their internet money too. As internet privacy only increases in value due to the marketization of everything we do on the internet, private internet money will become higher in demand.
- Inflation is coming and contrary to what the Federal Reserve wants us to think, it isn’t transitory. As Peter Schiff says, inflation is as transitory as subprime was contained in 2008. The fiat money system is showing serious cracks at this stage of the game. As inflation booms and the Fed’s money printer continues to brrrr, the entire crypto market will rise to hedge against the inflation. This will increasingly be the case as shortages in other inflation hedges like gold and silver grow. That said, Monero will be a prime beneficiary of this trend for reasons explained in point 3.
- Rising inflation is a political problem to those in power. The typical policy response is to institute price controls to keep basic necessities affordable. This, however, causes shortages of goods. When you have an increasing supply of money chasing fewer goods that don’t increase in price in correlation with the rising money supply, shortages ensue. Why is this good for Monero’s value? Well because shortages lead to sprawling black markets where individuals will look to sell these scarce goods at prices higher than the mandated price. Monero is the reserve currency of the black market. The more black market activity, the more popular Monero will become as a medium of exchange.
- Rising taxes will increase the demand for people to shelter their wealth from the IRS. While this cannot be legally advised in this article or by me, a tax professional, it is only logical that economic actors that act for their own self-interested profit motives instinctively look for ways to pay less tax. An entire $16 billion industry exists to help people pay less tax through the implementation of various strategies and deductions. Bottom line: People want to pay less tax however they can do it. Just as the rich and corporations park billions in overseas tax shelters, Monero will likely find similar use cases. Also note, if wealth taxes, i.e. taxes not only on income but on presently owned assets, become more popular, many will find discomfort in having significant amounts of wealth posted on public blockchains for the IRS to see.
- A new private decentralized exchange based on Monero is in the works. The exchange, if successful, will be game-changing for the world of crypto and finance generally. The Monero DEX will allow for peer-to-peer exchanges for not only crypto but national fiat currencies. Given Monero will be the dominant currency used in currency pairs on the exchange, demand for the currency will substantially increase. The project is still in its infancy stage, but it looks promising so far given the recent success of XMR-BTC trustless atomic swaps going live on the mainnet.
It is the opinion of this article that the market is drastically mispricing the value of privacy coins, especially Monero. While cryptocurrency has become popular for the potential gains one could make and the revolutionary appeal of blockchain technology, one of the initial virtues of cryptocurrency was the power of money returning to the private sector.
One of the reasons the world finds itself in the position that it currently does is because over 100 years ago, the government assumed control over the means of production of money. While cryptocurrencies like Bitcoin are indeed limited in supply and offer an appealing alternative to endlessly debased fiat currencies, governments can continue to extract real wealth and surveil one’s financial activity. While blockchain is revolutionary technology, true revolutionary money necessitates decentralization and privacy in order to secure global financial freedom.
As the market grows increasingly wary of having their wealth exposed to a growing system of technocratic totalitarian communism, privacy coins will be in high demand.
It is worth considering to get a lifeboat while it’s cheap.
I am not a financial professional and this is not financial, tax or any kind of advice. This article is posted merely for educational purposes.
