There’s more to it than meets the eye, and it seems to have gone over people’s heads.
Crypto has taken off since the March lows of last year, and it is to no surprise that there have been constant yells that people should get out and that assets like Bitcoin are in a bubble and everybody will get hurt by holding it. The people that have been yelling that it will crash for the past 8 months will stroke their egos and feel proud if it eventually does. A broken clock is still correct twice a day, and this would be a prime example of that.
Instead of understanding the cyclical nature of the assets and why the Bitcoin price is soaring, people have decided to close their minds and just yell that it’s a scam and a bubble without understanding what is actually going on here. Not only bears, but even a lot of new investors that simply pour their money in seems to have missed what is actually happening.
This is not a bubble, it’s a movement
You might think that because the prices are soaring, it means that we are simply in a bubble, and people will end up crying. I am not saying that it’s not the case, but there is much more to it. When Bitcoin increased as it did in 2017, it was more related to the bubble, and then we had the ICO bubble to go along with that as well. However, today it is a movement, and the increasing popularity of De-Fi is a testament to it.
Bitcoin and crypto, in general, have become an accepted asset class. More and more people will move from traditional finance to decentralized finance as time goes on. You even have institutions like J.P. Morgan creating their own coin such as the J.P. Morgan coin, which is a digital coin that is designed to make payments by using the blockchain.
Even though more and more companies and institutions are creating their own coins, it just proves that the idea behind Bitcoin is becoming more accepted by society as it gets implemented further. We even saw the news that a major financial player like Morgan Stanley will offer their investors the possibility of accessing Bitcoin, which is a major milestone. When big players make moves like this, the rest of the market is forced to take notice since it forces other parties to take action because you do not want to be the last mover in these markets. This matters because right now, Morgan Stanley offers a wider range of assets to their clients than other competitors, and they will have no choice but to follow suit. This is also clear considering how high the demand has been since covid-19.
Competition is coming
It is only a matter of time before we see a hoard of institutions invest in Bitcoin. You might wonder what I base that on, as I mentioned previously, companies do not want to be the last movers in relation to giving their customers access to Bitcoin. People are getting educated about crypto at a record amount of speed, considering it is getting more media attention than it has ever done before. Customers are demanding access to crypto since it has a part to play in a diversified portfolio.
With payment providers accessing Bitcoin as well, such as Visa enabling Bitcoin payments through its credit card, more adoption is bound to happen. I believe that it is only a matter of time before a company like Apple introduces it to Apple pay as well since it would only be a detriment for them if they would choose to not do so with other competitors implementing it. We are bound to see a hoard of institutions like hedge funds and insurance companies join the party as well.
The genius of Satoshi is underrated
What Satoshi has created is incredible, she has basically created the first digital signature that can’t be counterfeited. It has even led to discussions about centralized authorities such as central banks issuing digital currencies. While they are doing this, it just provides more life to Bitcoin. However, most people that are heavy-believers in this technology and have full awareness of its capabilities will be skeptical towards central authorities issuing their digital currencies.
Because the problem with that is that everything on the blockchain is transparent, and that would mean that they would have full access to people’s full spending data, which many would consider being too intrusive. We have already had issues with regard to data privacy, and this would go one step further. People do not mind playing by the rules, but they still want to make sure that their personal space is not intruded as well. So if this would be implemented, there would be a clear need for balance in that regard, and that is also why I believe the De-Fi revolution is so strong. It will take some time to find that perfect balance but in fact that the effort and discussions are ongoing is a testament to the power of blockchain technology.
In 18 months, this space will look very different from what it is looking like right now, and the people that are involved at this moment in time and are early adopters will be grateful that they took action earlier than 99% of the world. You will most likely see banks trying to get involved in crypto projects, and businesses such as PayPal have already started doing.
We frequently hear that people regret that they did not get involved in crypto earlier, well the second-best time to do so is now before all the institutions have gotten involved. Covid-19 gave life to crypto because of the fiscal and monetary responses that the government felt that they had to do as a response to the black-swan event and what it gave life to is an animal that can’t be stopped, and the world will not be the same because of it.