Wilson: Bitcoin investors should wait, Amazon recovered after 8 years
The continuing negative trend in many digital currency prices, including Bitcoin, has swept many investors out of the market and led to panic selling. Renowned venture capitalist Fred Wilson continues to believe in crypto currencies and compare history with Amazon.
In his opinion, long-term investors will be rewarded, similar to the dot-com era. In a blog post from 25.11.2018 he describes that although prices have fallen sharply, Amazon has taken a similar development since 1999 and it took 8 years for Amazon to become one of the largest and most influential companies in the world:
While prices for crypt installations in USD fell by 80-95% last year, they could and probably will fall. Amazon fell 80% per year from the bear market after the bubble and was halved again before bottoming out almost two years after its peak. What we still have to see in crypto-land is the absolute bottom formation. And that will definitely come.
The Amazon share price was just under 6 dollars around 2001. Anyone who invested USD 1,000 in Amazon shares at that time would be a lucky investor with a considerable asset today. During the dot-com era, the share price fell from its all-time high of USD 90 to USD 6. Amazon took more than 8 years to reach this altitude again. Today the Amazon share price is more than 1580 USD.
Wilson emphasizes in this context that every major price drop was characterized by a hard correction of 85% on average. He is of the opinion that Bitcoin and Co. will continue to go through bull markets with typical cycles in the coming years. He thinks that investors will be rewarded, similar to early investors in technology stocks (freely translated):
I think a crypto asset (and maybe a series of crypto assets) is going to have a price chart like the current one from Amazon in 18 years. But we will have to do what Amazon has done, downsize, create values and survive to get there. And I think things will get worse before they get better.
But those who stayed were rewarded even though it took a long time. We did not see any meaningful paydays in the Internet industry until the period 2007-2008, and the big paydays only came from 2010 and beyond.
Wilson is optimistic for the future of the crypto industry and points to the ongoing progress and increasing adaptation worldwide. Bitcoin and Co. are not dead, even if this is always sold as an official and correct opinion of the public.
