Mass adoption of cryptocurrency has been making huge strides lately. While 2017 was the year for mass inflows of new capital into the crypto space, 2018 has been the year leading into mass adoption.
- Bakkt, the owner of the NYSE (New York Stock Exchange), is going to great lengths with megalithic monetary players to integrate crypto with mainstream finance.
- Yahoo Finance has introduced trading of Bitcoin, Litecoin, and Ethereum.
- Square, the payment processor with millions of retail partners that is trending towards $3B in annual revenues, has earned a patent for a new crypto payments network that will allow retailers everywhere to accept cryptocurrency
- Lastly, we believe that the current correction in crypto prices is an over-reaction to Goldman Sachs nixing plans for a crytpo trading desk. They are instead focusing on crypto custody in the short-term, which will bring more funds into the sector than a trading desk.
Bakkt and Mass Adoption of Cryptocurrency
Fortune.com recently published an article about a new crypto company called Bakkt entitled “The NYSE’s Owner Wants to Bring Bitcoin to Your 401(k). Are Crypto Credit Cards Next?”
The title is a little misleading. Technically, it’s already possible to include Bitcoin in your retirement account, and crypto debit cards have existed for several years now.
But Bakkt represents a significant step forward in the process of mass adoption.
This morning Intercontinental Exchange—the trading colossus that owns the New York Stock Exchange and other global marketplaces—announced that it is forming a new company called Bakkt. The new venture, which is expected to launch in November, will offer a federally regulated market for Bitcoin. With the creation of Bakkt, ICE aims to transform Bitcoin into a trusted global currency with broad usage.
Microsoft, Boston Consulting Group, and Starbucks are all in on the deal.
Considering that Bitcoin has been mocked as being little more than a useless tulip bulb since at least 2013, words can’t quite express how huge this is.
For years, many people have said things like “you’ll never be able to buy a cup of coffee with bitcoin.” As if this is a legitimate criticism.
But now, even that kind of senseless rhetoric won’t hold up. Bitcoin users will, in fact, soon be able to buy a cup of coffee with Bitcoin (even though they already can if they use bitcoin-backed debit cards like those offered by SHIFT and BitPay).
While Bakkt is a huge development, it should be noted that some market observers have expressed more cynical sentiments on the matter.
“A regulated exchange with a custodian in the middle contradicts the basic idea of Bitcoin,” says Abhishek Punia, a crypto-currency analyst with venture capital firm Draper Associates. “Bitcoin was designed to be decentralized, without intermediaries taking fees. A regulated exchange may be popular for a short period of time, but it’s not the future. The future will be the original idea of a peer-to-peer network.”
Personally, I don’t think it’s an either/or equation. There has to be both, and the two aren’t mutually exclusive.
Coinbase Didn’t Ruin Crypto and Neither Will Bakkt
Institutional investors will be more willing to enter the crypto space if it has been wrapped up in nice packages they are already familiar with, such as ETFs and mutual funds. And more people will save Bitcoin for the long-term if it’s easier to do so with IRAs and 401(k)s.
The original system of a peer-to-peer payments network can still thrive in parallel to big exchanges like Bakkt.
Coinbase is a very large exchange that has centralized a portion of the market to an extent, but many people still use their own individual desktop, mobile, and hardware wallets, for example.
But during this first week of September, markets haven’t been focusing on developments like Bakkt. They’re more concerned with trivial news bites.
Crypto Market Tanks Thanks to Headlines From Banks
Right now, headlines are being dominated by the fact that Bitcoin has suffered another flash crash in the face of Goldman Sachs deciding not to open a crypto trading desk.
This is a joke – a massive overreaction to a piece of almost irrelevant news. In all likelihood, the opportunity has been seized upon by trading whales to cover their shorts and buy the dip.
Remember when Jamie Dimon called Bitcoin “a fraud?”
There was a massive correction followed by an epic buying frenzy. I’m not saying this time will be exactly the same. But it probably won’t be that different. History doesn’t always repeat itself, but it does often rhyme.
Reminder that NOTHING has affected #bitcoin today. We got to 20k without Goldman and don’t need them for the next ATH either.If you believe the news, you should not be in the space in the first place, and anyway you were only here to make fiat. So get rekt and get out.— Ş for Satoshi (50K 2018!) (@TenaciousBTC) September 5, 2018
Now BTC has broken beneath 7,000 USD and stands at $6,412 at the time of writing, according to Coindesk’s BPI. This is being treated as some kind of epic collapse, even though BTC was trading near 6,000 USD just a few weeks ago.
Back in June, and then again in August, I speculated that this would be the equilibrium point for BTC for a while. That’s because during Fall 2017, the price spiked from $6,400 to $20,000 before correcting in 2018. So it’s no surprise that it has continued to fall back to where it was before the massive surge in Q4 2017.
This won’t last too much longer, however. The current dip represents a significant buying opportunity the likes of which may never be seen again after this year.
It’s worth noting that research firm Satis Group recently stated that their personal price prediction for BTC is $96,000 by 2023. They also stated that BCH would fall to $180 and XRP to $0.01.
$BTC (shorts) some shorts closed in #bitcoin drop but now loading continues, BB’s on the 4hr getting tighter again pic.twitter.com/zWlNNxWctZ— Chonis Trading (@BigChonis) September 5, 2018
But none of this short-term movement really has an impact on the mass adoption of cryptocurrency, all things considered. What matters is that mass adoption keeps creeping in from all angles.
2018 has seen so much positive news even as the market cap of all cryptocurrencies has cratered on a year-to-date basis. However, it’s important to note that just a few years ago, the entire crypto market amounted to less than 12 billion USD.
Today, the market is measured in the hundreds of billions. Those who focus only on the short-term seem to forget this fact. At the time of writing, the crypto market holds more than $204 billion dollars of capital.
Just as the price of Bitcoin tends to go through periods of long lulls with little action punctuated by quick bursts of explosive movement, so too does the process of mass adoption of cryptocurrency.
Square Achieves Patent for Crypto Payment Network
Payments giant Square has scored a ground-breaking patent for a new payment network that will allow users to exchange value using cryptocurrency.
From Bitcoin Market Insider:
Square was lauded by Wall St analysts because of its invention, which joins its debit and cash cards into its Cash App. Quite besides hosting cryptocurrencies on the stage (because this year its clients can purchase BTC), Square has also been touted as a stage to bank the unbanked because of borderless payments. A analyst for Guggenheim, among the largest US riches and finance managers, said of the firm ”we believe Cash Program’s future earnings potential is underappreciated, we view it providing a important services function to the underbanked.”
One of the many criticisms of crypto is that it can’t serve those who aren’t already connected to the financial system, i.e., the unbanked. What good is a new financial system if it can’t be inclusive?
Square is disproving that theory already.
Crypto Available on Yahoo Finance
Over the last week, Yahoo Finance has added Bitcoin, Litecoin, and Ethereum to its trading platform. The option to trade crypto is currently only available in the USA. The company has not yet given a public statement relating to its new features.
This is reminiscent of other large financial platforms adding crypto, like the smart-phone stock trading app Robin Hood. As mass adoption of cryptocurrency grows, those who do not include options for crypto become irrelevant.
After witnessing the exponential growth in trading volumes present on exchanges like Poloniex and Coinbase (both of which experienced crashes and user downtimes due to insurmountable levels of activity) throughout 2017, more traditional exchanges want their share of the fees that come with that kind of activity.
For early adopters of crypto, it’s hard to believe how fast this change is occurring. I don’t think any of us expected to see BTC futures included in the financial market ticker on CNBC, for example, or for crypto trading options to be available on mainstream platforms like Yahoo Finance.
Mass Adoption of Cryptocurrency Marches On
In the end, nothing can stop the mass adoption of cryptocurrency.
Bakkt could potentially bring in tons of institutional investors. Square’s recent patent demonstrates the continued trend of crypto payment integration. And Yahoo Finance is just the latest example of a trading platform having to include crypto to stay relevant.
In the past, it has taken decades for new technological innovations to sprout the necessary infrastructure and related industries that allow for mass adoption. Email, for example, became a reality in the 1970s but took another thirty years to become widespread.
As time goes on, new technologies become integrated into the mainstream with greater ease and rapidity.
With crypto, the adoption timeframe could be shorter than anything we’ve seen before. The world is much different today, and advancements happen so rapidly that it has become difficult to keep up.
With personal computers and mobile devices now existing almost everywhere (even in many parts of the developing world), we’re already much closer to mass adoption than email was in the 1990s.
Several studies published this summer provide tangible evidence for the fact that mass adoption of cryptocurrency will become a reality within the next decade. At the current pace, it may happen even sooner.
”I don’t believe we shall ever have a good money again before we take the thing out of the hands of government. That is, we can’t take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can’t.” —Hayek 1984 #bitcoin
Get our cryptocurrency research and top picks by subscribing here.
[Originally Published on GoldStockBull.com on September 6th, 2018.]
No comments:
Post a Comment