Turning Back the Clock on the Future
In 1993 the Dow Jones Industrial Average was under 4,000 and Whitney Houston led the charts; it seems like a different era. But that is how far back we have to go in the evolution of the internet to find a comparable point in the growth of the new asset class, cryptoassets (e.g., Bitcoin, Ether, etc.). If that comparison is fair, there may be considerable growth ahead in cryptoassets.

  • Similar to the strong double-digit percentage growth in internet users we saw in the mid-1990s, cryptoasset users are growing rapidly today. The number of wallet users on blockchain.com is up over 70% year over year.

  • In fact, the crypto adoption rate today is estimated to be similar to the penetration of internet users in 1993 or approximately 0.3% of the global population.

  • While the future of cryptoassets is uncertain, if its value creation is anything like what we experienced in the 1990s internet era, this new asset class may usher in new ways of doing business and productivity improvements.

The views expressed are the views of Fred Alger Management, Inc. as of September 2018. These views are subject to change at any time and they do not guarantee the future performance of the markets, any security or any funds managed by Fred Alger Management, Inc. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities.

Risk Disclosure: Investing in the stock market involves gains and losses and may not be suitable for all investors. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Many technology companies have limited operating histories and prices of these companies' securities have historically been more volatile than other securities, especially over the short term. Technology companies may also face increased competition, government regulation, and risk of obsolescence due to progress in technological developments. 

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