Remember when only stocks mattered and Bitcoin was just some weird “magic internet money” used by anarchists and criminals? I do. Before truly discovering crypto I marveled at the amazing growth in the seemingly unstoppable FANG stocks (Facebook, Amazon, Netflix, and Google- now known as Alphabet). These centralized giants conquered the internet as we know it.

Luckily the narrative around crypto is starting to change, evidenced by the amazing bull run that began in late 2016. People are beginning to see the truth behind the crypto slander and naysaying. Crypto is more than just Bitcoin. A myriad of crypto projects are tackling use cases that will vastly improve and disrupt existing industries from banking to distributed computing. These future decentralized giants will soon be the marvel of mainstream investors.

“How?”, you ask.

It’s simple, technology investors go where the growth is. The Millennial generation is obsessed with technological innovation. Let’s face it, they were the ones who got their parents into Facebook. They love Amazon Prime, and streaming the latest Netflix shows. Their investment flows have followed these interests.

And now… the Millennials are beginning to enter their peak earnings years. They will have more money than ever to invest, and they are starting to understand how crypto assets can solve problems that centralized giants like FANG can’t solve without completely changing their business models and thus profit forecasts.

The Coin Savage team believes that we are witnessing “Peak Centralization”. A time when consumers (and therefore the investing public) are starting to see a problem with centralized giants (think data, privacy, etc.) and are therefore adjusting their preferences. At the same time, crypto projects are tackling exciting business use cases with huge potential target market sizes.

We believe that investors will: (1) recognize the power of decentralization and blockchain technology; (2) get excited about the potential; and (3) fuel an extremely powerful bull market in the crypto space for many years, not dissimilar to what they have done for the FANG stocks. Crypto Asset investing is venture capital WITH liquidity.

The Coming FANG Regulations

It was tough watching Mark Zuckerberg testify in front of Congress. Not only because Zuckerberg was so obviously trying to dance around the fact that Facebook rents/sells our data to third parties who don’t always have our best interests in mind, but also because Congress was so terrible at understanding. Despite Facebook compromising the data of millions of Americans, our Congressional representatives just didn’t seem to understand the ramifications.

CENTRALIZED PLATFORMS WILL CONTINUE TO FAIL TO PROTECT CONSUMER DATA… there is just no absolute way to protect data when it is centralized. We need new platforms that are decentralized to begin to solve the problem. Facebook and Google will survive largely unharmed from this latest controversy but there will be another scandal… because the data is centralized and therefore too valuable of a target for bad actors.

What does this mean for existing FANG investors?

These investors will need to discount stock prices for regulatory risk (because lawmakers will at some point have to respond to the breaches with new regulations). The drum beat will become louder and louder with each new scandal.

FANG Valuations Aren’t Cheap

FANG stocks make up 50% of the total market capitalization of the NASDAQ 100 (when you add Apple into the line up… creating FAANG). FANG has a total market capitalization of $2.210 trillion. When adding Apple to the mix (FAANG), the total market capitalization becomes $3.134 trillion. That is just 5 stocks.

A common argument is that the valuations on crypto assets are astronomical. Would you consider these Price to Earnings (P/E) Ratios cheap?

Facebook (FB) P/E= 30.75

Amazon (AMZN) P/E= 262.26

Netflix (NFLX) P/E= 279.78

Alphabet (GOOG) P/E= 58.92

They all trade at a premium to the S&P 500 price to earnings ratio.

The FANG companies are not young, all of them are over 10 years old. Whenever a not so young group of 5 stocks makes up 50% of the tech heavy Nasdaq 100, we can assume that the companies are entering maturity not hyper growth mode.

Hyper growth mode is what young, investment ready Millennials will pour money into. The sun is setting on the FANG party, but the growth is just beginning in the crypto projects… the money will flow there. The money follows the growth.

Investment Flows into Crypto Assets

Let’s have some fun.

By taking the total market capitalization of FAANG ($3.134 Trillion), and comparing it to the total market capitalization of the crypto asset market ($328 Billion) we gain an interesting insight.

If the crypto market were to only capture $1 out of every $10 currently invested in FAANG, it would double.

This seems likely.

To put it another way, I’ll ask you a question.

Would you rather put your money in 5 maturing technology companies that trade at pricey valuations and are increasingly going to face regulatory concerns going to the very core of their business models OR would you like to allocate some money to the next generation hyper growth story?

Crypto is the new tech investment, FANG is old tech.

Invest Savagely.