Many people today may think the price appreciation of cryptocurrencies is where the value is, but the underlying ecosystem could be where the true value lies long term. In this Motley Fool Live segment from "The Crypto Show," recorded on April 20, Fool.com contributors Travis Hoium and Chris MacDonald consider some different ways to think about the future value of cryptocurrencies.
10 stocks we like better than Bitcoin
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Bitcoin wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of April 7, 2022
Travis Hoium: I'll give you the way that I think about cryptocurrencies. I know that there are a million different opinions out there. Bitcoin maybe kind of stands on its own, because it's, I think, a lot of people think about it as digital gold. But I look at the underlying cryptocurrency itself as the currency that makes the ecosystem run, or the digital economy run.
So from an investment perspective, I'm typically not investing in Solana. I'm investing in an NFT, which to me is more like investing in a stock, whereas, like the analogy is the U.S. dollar. I'm using a U.S. dollar to buy a stock. But it's the stock that I want to own, because that's the utility, that's what's going to grow. That's what's going to provide value long term. To me, trading Solana or trading Ethereum or trading Bitcoin is more like trading euros or trading dollars.
They're really big markets, but that isn't where the value is, and I think that's kind of a strange thing that's happened in cryptocurrencies. The price appreciation has happened really quickly and some people think that's where the value is. And I think long-term, maybe not this year or next year, we're going to see that be the case -- that price appreciation isn't really tied to trading. It's really tied to what is the value of that ecosystem.
Do you want to hold dollars because you are bullish on the U.S. economy or do you want to hold, you know, euros because you're more bullish on the European economy? That's the way that I think about it, but I know everybody may be a little different there.
Chris MacDonald: Yeah, another way I think about it too, Travis, is it's kind of like -- if you're thinking about and you want to compare it to stocks, let's say you want to buy Apple or Microsoft. You know you're buying -- what are you buying with Apple? You know you're buying the iPhone, the iPad, the ecosystem. And with Microsoft, it's the same thing. You're getting Windows and OS -- or, not OS, pardon me -- but you're getting all the Microsoft Suite of products with that. So it's kind of, think about it that way, there's a lot of different ways to value these things. And a lot of people generally look at it as the ecosystem value as what's driving the core value of tokens. But there is, right now, a lot of trading activity and derivatives and all sorts of things driving value over and above that. But on a fundamental basis, that's one way to think about it, for sure.