The never-ending trend of cryptocurrency adoption in the consumer and business sectors
Let’s go back about three years in time, to February 10, 2014. The BTC price had just reached the 100 USD mark on Bitfinex — a major exchange for the young currency pair. This points out a possible trend in which BTC becomes the future of consumerism and the business sector.
Who wouldn’t like to get their hands on a time machine to go back to those earlier times to buy some bitcoin? Of course, it’s easy to make a decision in retrospect. However, in reality, people are driven by panic and their emotions, often even by fear and inability to act in the unknown.
The famous value investor, Warren Buffett, called Bitcoin a ‘mirage’; obviously forgetting his own, and arguably his most famous, quote.
“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful” — W. Buffett
Those early days were rife with unfavourable circumstances, which threatened to destabilize and kill the currency. Two examples were Bitcoin’s strong association with crime, and the unfortunate closure of Mt. Gox (and no less than fifteen other exchanges), which meant customers lost their funds.
However, despite all the teething troubles, several legitimate services did manage to emerge during this period, such as Blockchain.info and BitPay. What both of these services did, was to allow their customers to pay for their favorite products with bitcoin, thus eliminating both fraud and gateway fees.
Nevertheless, the masses did not hesitate to catch on to the trend, causing the digital asset to rocket along a high-speed rollercoaster, speedily switching between the blue sky and the cold, hard ground. In fact, according to many well-known fund managers and executives; during that period, Bitcoin died no less than 126 times.
Even though Bitcoin’s reputation was disputable mainly because of the fear and uncertainty that innovation brings, Bitcoin and digital currencies, in general, managed to survive. The trends we are noting are very promising and prospects of a bright future that Bitcoin created for itself and other forms of cryptocurrency are very much visible.
The advancements in the transactions accessibility, better regulation, and adaptability of a process to the individuals are just some of the reasons why analysts consider that Bitcoin has a bright future in the currency world.
It’s worth noting that, despite its alleged robustness and agility, the market cap for bitcoin and other tradeable blockchain assets, is still relatively small and does not come anywhere near the NYSE FANG stocks’ cap. Some might say that this last point is exactly why blockchain assets are such a great early investment opportunity.
2016 marked the pivotal point in price-action, regulation, and broad adaptation (wired.com) for BTC.
Here’s how it all changed:
1. Show Me the Hockey-Stick Chart — Favourable Price Action
One of the key reasons why bitcoin and blockchain technology should be meticulously followed is due to their scarcity and value of cryptocurrency and its technology. The price of Bitcoin has increased, over three times, against all major currencies (EUR, USD, JPY, CNY) and similar forms of digital currencies such as Ripple or Ethereum. In fact, bitcoin beat all the major US stocks & indices in 2016 and was a close tie with gold (1 Ounce per bitcoin). Additionally, Bitcoin is not fully and freely available which will make its value grow over the years. Ever since it started to fluctuate but in any case, its value has surpassed all expectations and will continue to do as predictions suggest.
2. Volumes, Volumes, Volumes
Trading volumes have increased on all major exchanges. This rise is an indication of the growing adoption of Bitcoin, both among individuals and the business sector. This is primarily visible in the increase of Bitcoin use for the bank and commercial transactions of big corporations and tech giants which is followed by the rising interest of individuals in blockchain & Bitcoin in Google searches.
While the blockchain chart might look more appealing, Bitcoin is still the big winner on volumes, perhaps because of its growing popularity among non-technical consumers. This can be very visible in the increase of consumers that value transparency in transactions, as well as fast access to their capital and liquidity pools.
As visible in the analysis, there is an extensive increase in the use of bitcoin for the transaction process and therefore an increase in the influx of customers who value simple, secure transactions with full control. This basically covers all corporations and an increasing number of individuals.
Weekly Localbitcoin.com trade volume. Source: coin.dance
Total bitcoin transactions per month, source: Wikipedia — history of Bitcoin
Blockchain interest 5Y chart. Source: Google Trends
Blockchain vs. Bitcoin 5Y chart. Source: Google Trends
3. Bitcoin, Not the Bad Guy Anymore
According to recent research, carried out by the Central Bank of Germany, in conjunction with independent researchers, crime is no longer a leading factor in the Bitcoin economy.
Even though in the beginning there was a concern regarding the accessibility of Bitcoin on the dark web, the tracking of transactions and the level of transparency created to make Bitcoin safe for use seem to push this narrative away.
While Bitcoin was never intended to be tracked by governments, the transparency of its blockchain puts it in a more favourable regulatory category than some more obscure currencies, such as z-cash.
In this post, ISS World Training specifies the numerous techniques of tracking down Bitcoin transactions.
In addition, a more detailed explanation of why criminals really cannot hide behind Bitcoin can be found here, in ScienceMag.
Contributing to this, now cryptocurrency creators aspire to become part of the financial media system and seek to regulate transactions, stop tax evasions, protect the customers and increase security making it more appealing to everyday use.
4. Rising VC Interest
According to venturescanner.com, Bitcoin & blockchain, start-up funding grew, to 550 Million USD in 2016, closing the fourth year of consistent growth. This is a fresh trend, waiting for a major breakthrough, and shouldn’t be overlooked.
One of these VC-backed startups, shapeshift.io, is a direct competitor of nexchange.co.uk. Shapeshift was able to raise an additional round of funding (10.4 Million USD according to Business Insider) on top of recently enjoying a significant volume spike.
Yearly Bitcoin & Blockchain investments. Source: venturescanner.com