The recent announcement of the shutdown of ICQ, one of the first instant messaging programs with nearly 30 years of history, offers us an opportunity to reflect on technological evolution and draw comparisons with the current stage of crypto assets. Just as in the early days of the internet, the crypto space is full of promises, innovations, and a high level of skepticism.

In the 90s, the internet was uncharted territory. Early applications were rudimentary, serving as precursors to the sophisticated web services we use today. ICQ, with its simple interface and basic functionalities, was revolutionary and paved the way for today's leading communication platforms, such as WhatsApp and Telegram, and modern social networks.

Just as rudimentary internet applications paved the way for today's digital giants, today's blockchain-based smart contract applications (dApps) are embryonic versions of what could become the backbone of future financial systems. Current dApps may seem basic, mainly facilitating activities such as trading and lending within the crypto ecosystem. However, their potential mirrors that of early internet applications.

For example, the capabilities of these smart contracts on the Ethereum network are still in the early stages of development, similar to the first HTML web pages. Nevertheless, these dApps already demonstrate how they can revolutionize various industries, from finance to supply chain management.

Beyond these exciting functionalities, the recent approval of Ether ETFs (exchange-traded funds) in the US marks a significant moment, similar to the commercialization of the internet, potentially signaling broader acceptance and integration of smart contract platforms into traditional finance.

The closure of ICQ, which once had over 100 million users, reminds us of the impermanence of pioneers and the need for evolution to remain relevant. Internet companies that did not adapt fell by the wayside, while those that knew how to innovate thrived. This lesson is pertinent to the crypto market, where constant innovation and adaptation are crucial.

From an investment strategy perspective, just as diversifying into indexes like the Nasdaq 100 in the 90s proved more advantageous than focusing on specific companies like AOL (owner of ICQ at the time) or Yahoo!, diversifying a crypto portfolio today into indexes like the NCI (Nasdaq Crypto Index) might be a wiser strategy than investing only in Bitcoin or Ethereum, even though some projects are still as nascent as Amazon or Google were at that time. The fact is, it's very difficult to know who the true winners of this sector will be in 10 or 15 years, although there is no shortage of predictions today. An index like the NCI gives you exposure to this secular trend without necessarily concentrating on one asset that may not survive the test of time.

In the 90s, the internet saw the emergence of e-commerce giants that integrated digital technology with traditional business models. Today, we are seeing a similar trend with crypto, as traditional financial institutions adopt and integrate these assets into their product portfolios. The recent interest of financial giants like BlackRock and Franklin Templeton in tokenizing fixed-income funds underlines this shift. Here in Brazil, practically all major banks already have their digital asset departments and are preparing for the tokenization of the economy through DREX, the Brazilian digital currency that promises to bring programmability to money through smart contracts.

Institutional adoption is accelerating, and we are witnessing a regime change where crypto is becoming more integrated with traditional finance. This integration promises to open a potential market of over $50 trillion, just as the internet created a new global market for various goods and services.

Crypto assets, like the internet before them, represent a generational investment opportunity. The infrastructure being built today, from decentralized finance (DeFi) platforms to the tokenization of various real-world assets, mirrors the foundational work of the early internet infrastructure. Just as the internet transformed commerce, media, and communication, blockchain technology is poised to revolutionize finance, governance, and digital identity. To paraphrase Bill Gates, "We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten." May the farewell to ICQ remind us of this maxim.

 

 

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