WHY RAPPER ‘21 SAVAGE NO LONGER WEARS JEWELLERY’?
Blogs on 10th June 2019
Why rapper ‘21 Savage no longer wears jewellery’.
Despite the rapid increase in cashless transactions, in 2019 cryptocurrency still has a taboo status due to its association with the dark web. But it’s becoming clear that this attitude is about to change – as more and more celebrities use crypto as a long-term investment, rather than investing their money in more conservative assets such as gold or real estate. If people with enormous wealth (read: being able to afford top-notch financial advisors) are already leveraging the still-underpriced cryptocurrencies as a long-term investment, a lot of people will assume that crypto is not just a passing fad. It’s here to stay, and disrupt the way we think about money for good.
Hence, now that many people are still apprehensive about it, it’s the best time in history to jump on the bandwagon and invest in crypto.
Let’s see why and how.
Why ‘21 Savage no longer wears jewellery’ ?
In February 2018, rapper 21 Savage’s manager Tweeted that ‘21 Savage no longer wears jewellery’.
Instead of buying gold, houses and investing in businesses, he’s investing his money in cryptocurrencies. And he wants to inspire other rappers to do it too: ‘crypto & youth start-ups is what he wanna make cool for young rappers to do’ (sic).
What does that mean for cryptocurrency investments?
By becoming one of the first celebrities to openly endorse cryptocurrency, 21 Savage launched it to new heights of authenticity as a viable investment. He also positioned himself as a trail-blazer in cryptocurrency investments. His intention (as shown by his manager’s Tweet) was to show other rappers that they can make more out of their hard-earned dollars than a measly 8% on investment properties (real estate and commercial investments are still popular in the rap world – think 50 Cent’s venture into VitaminWater, or Kanye and his multitude of mansions and condos).
For sure, 21 Savage’s public move away from diamond-encrusted chains towards cryptocurrency represents a ground-breaking moment in public perception.
Was it a good move though? Will it inspire others to invest in crypto and make a lasting impact? Or is it just the case of yet-another-rapper-jumping-on-an-over-crowded-bandwagon?
Let’s analyse the situation in more detail.
Is Cryptocurrency the new Gold?
Although gold is not commonly accepted as payment for goods, it is one of the most versatile assets available. The inert value and finite quantity of gold has made it a favourite for investors (and rappers alike). Also, it can be converted into almost any fiat currency with relative ease.
By contrast, cryptocurrency has no intrinsic value. In fact, it is almost devalued by its infamous association with the purchase of contraband items on the ‘dark web’. And the headlines detailing billion-dollar hacking heists against crypto exchanges, creating a widespread misconception about its safety (even though the issues resulted from security flaws in the cryptocurrency exchanges themselves, rather than the currency) do not help with establishing crypto as a viable payment and investment method.
What also escapes the public eye is the fact that the risk of using a cryptocurrency exchange is actually lower compared to traditional banks. Most – if not all – banks have suffered some sort of privacy breaches, including cyberattacks but also data leaks due to other security failings.
The sheer amount of information a bank holds on their customers means that they are prime target for cybercriminals, not to mention the increased risks due to third-party vendors, who facilitate most transactions online.
Cryptocurrency eliminates the need for third-party validation and transaction requests, therefore reducing the level of risk involved.
This makes it a relatively safe investment, and an alternative to precious metals.
The Rise and Fall of Bitcoin
Both gold and cryptocurrency have had their fair share of ups and downs in market terms (Fig 1). We have heard both the tales of gargantuan gains made by early adopters of cryptocurrency and the unfortunate losses of those people who didn’t take it seriously (remember the guy who paid 10,000 Bitcoins for two pizzas?).
The most popular currency, Bitcoin, saw a meteoric rise in 2017-2018, followed by a dramatic fall towards the end of 2018 and a lull in prices moving into 2019. Some investors will see this as a sign to cash in and quit while they’re ahead, whilst others believe this is an opportunity to tap into the crypto market and take advantage of current low costs.
Will Bitcoin climb back to its original podium? That is difficult to predict, but we can draw a comparison between the current situation and what happened nearly two decades ago: the dot.com rush.
Will it bounce back?
Looking back to the early 2000s, it was clear that a bubble was emerging, a bubble that eventually burst. Of course, there were losers in the dot.com industry, but on the other hand, there were brands that managed to escape the crash and – although not unscathed – picked themselves up and eventually came out on top. Take Amazon, a company whose shares dropped 5000% in 3 years ($300 in Dec 1998 to $6 per share in Dec 2001, Fig 2) but then managed to recover and hit even dizzier new heights.
By contrast to crypto though, Amazon isn’t exactly doing anything ground-breaking. An online marketplace wasn’t a new concept, Amazon was just streamlining an existing idea with new technologies; market places have been around for centuries, but bringing them online completely changed the game – so much so that these days it would be hard to name a retailer or brand that doesn’t have an online presence.
On the other hand, cryptocurrency has disrupted the financial market in a completely novel way – by offering a completely new method for cashless money exchange. How did it do it?
Cryptocurrency: the next ‘Industrial Revolution’?
The key difference between cryptocurrency, fiat currency and gold is that cryptocurrency isn’t just a currency, it’s a revolutionary new technology. The underlying concept of cryptocurrency is to decentralise cashflow by using a distributed ledger in the form of blockchain rather than relying on a regulated middle man, a bank.
Cryptocurrency has a revolutionary potential, bringing dramatic change to a variety of sectors that involve transaction verification or contracts, not exclusively banking.
The impact that blockchain is likely to make on several industries means we can easily compare today’s developments in crypto to industrial revolution.
Due to the nature of blockchain technology, transactions made on the blockchain are a lot more transparent than traditional transactions, meaning that fraudulent transactions are much harder to forge.
It is this technology superiority that gives cryptocurrency its true value; even if cryptocurrency doesn’t end up becoming a mainstream method of payment, the technology that powers it has already started making an impact on our digital relationships with vendors.
Many large enterprises as well as countless start-ups have taken an interest in using this technology and have openly disclosed large investments into using blockchain for many other purposes than purely monetary transactions. Once blockchain becomes a norm for contract signature, vehicle purchase, or even electoral polling – it is likely that consumer trust in cryptocurrency will also increase, and that its value will once again rise.
Invest for Success
Like Amazon, the success of cryptocurrency depends on its adoption by the general public. Whilst we can’t predict the future, we also can’t deny the potential of distributed ledgers and blockchain technology.
As crypto developers become more focused on innovating new algorithms to implement safer, faster and cheaper transactions, the interest in cryptocurrency continues to grow. Many of the issues linked to Bitcoin have now been tackled and resolved, and a lot of new currency brands have emerged. Even if Bitcoin is the original and most popular for now, it is hard to say which coin will be the most widely adopted in 5-or-10 years’ time.
And although it is also impossible to predict whether 21 Savage is going to make huge gains on his crypto investment, what can be said for sure is that he has indeed made a good decision to diversify his portfolio at a time when crypto prices are relatively low. If the graphical comparisons to Amazon’s stocks are anything to go by, then he’s in for one hell of a ride.