Is Monero a Good Investment? (2020 Outlook)
Monero is the ultimate privacy coin with unparalleled privacy features which essentially guarantee complete anonymity and privacy. This comes with some issues and risks, particularly when investing in Monero for the long-term, however they’re essential for a true privacy coin.
This makes determining Monero’s true value and long-term potential essentially impossible, however we still invest in Monero for reasons we’ll cover below.
The Fundamentals: Why Monero is THE Privacy Coin
While there’s other privacy coins, and many others with minor privacy features, none of them even come close to what Monero has in terms of Privacy. Not only does monero have superb privacy, but the developers/contributors to the monero project have proved to be committed to “the cause” of ultimate privacy.
This presents issues, including the fact that if your wallet is ever uncovered, or an exchange that you hold your monero on is ever hacked, there is absolutely no way you’ll ever know where it went or be able to recover it. With Bitcoin or other non-privacy coins the wallet can be found and effectively banned from exchanges and have the coins more or less “marked” and tracked to the specific organization/individual if they ever spend it. The same applies with semi-private coins like Dash. But with Monero it’s absolutely not going to happen.
Is the rest of Monero’s features any good? Not really, it’s otherwise a pretty standard or even mediocre coin in terms of technology — and that probably won’t change. But people who want or NEED privacy don’t care about instant transactions, near fee-less transactions, or anything of the sort. Privacy is the only relevant feature if you feel the need for a privacy coin.
All in this makes us believe Monero will essentially forever be the go-to privacy coin. It’s not going away, as even if crypto turns out to be garbage with no value in general (unlikely in our view) there’s absolutely no better alternative to Monero. Nothing is as anonymous as Monero, not even Cash. This means if you want to buy something illegal or transfer funds truly in a private way, monero is really your only choice from here on out.
The market for illegal materials, or objectionable material, is never going away — even if governments collapse and we have anarchy people still won’t want their neighbors to know they bought something strange or potentially obscene, and others will simply prefer to stay completely anonymous in their transacting.
Our Outlook: Do We Invest in Monero?
Yes — However it’s definitely not something we dump tons of our money into — or even a significant amount. We don’t even put the majority of our cryptocurrency-allocated capital into Monero, as we don’t believe it has the highest probability of large-scale adoption. Currently we aim to hold around 0.3% to 0.5% of our networth in Monero, which may not sound like much, and it isn’t.
This is because we don’t see Monero is making a ton of money, but much like how we feel about Dash, it’s an excellent hedge against potential fiat currency crises or collapses. The only difference is we don’t see monero growing in real-value terms by a set amount, as we honestly can’t predict such things due to the purpose and nature of the coin.
Instead, we choose to buy and hold some monero as a hedge against potential police-state behavior or needed capital for extreme events and potential illegal payments that may be needed to guarantee our, say, transportation/smuggling to a different area. We don’t concern ourselves with the price from day to day or month to month or even year to year, for us this is a buy it and forget it (more or less) investment for our lives. It’s insurance that may, if the <1% chance (in our view) plays out, not only save our lives but be potentially worth unimagineable amounts of money.
Why don't we invest more into Monero?
We do not see Monero being a viable method of exchange for average everyday people unless a horrifying 1984-esq police state occurs, and even then most people would not be competent or confident enough to use it.
As a result, due to most people lacking the care for such privacy, and monero’s lack of user-friendly features that other cryptocurrencies like Dash have focused on (attractive mobile wallets and ease of payments, etc) we do not see wide-scale adoption outside of criminal activity and a very small niche community of individuals. This still can facilitate a multi-trillion dollar market cap and tremendous upside potential — however the likelihoods are relatively low in our view without unlikely events occurring, which means we can’t justify more than 1% of our over-all networth being directed towards Monero.
Our view may be different than yours, but over-all we’d say Monero is the privacy coin to own. The question on if it’s a good investment and how much (if any) should you own depends on your assumptions regarding how the future plays out. Ours by far isn’t bright — but we don’t see the probabilities being in Monero’s favor, and thus our position is extremely limited to those probabilities.