By Bill Taylor/ Fintek Capital
With the recent huge market sell off since the beginning of the year in the cryptocurrency sector, a new dawn is emerging – especially for bitcoin.
Bitcoin was originally envisioned as a replacement for the entire financial system, replacing fiat currencies with decentralized ledger technology (blockchain) and thus “crowning” bitcoin as a global currency. However, as might be expected, a whole lot of obstacles have held that vision in check, with one of the biggest being the volatility of bitcoin itself. To be used as a form of payment, it is certainly not helpful to have instability and big swings in a currency.
Is Wall Street about to inadvertently help bitcoin become what Satoshi Nakamoto’s (purported bitcoin founder…..if that’s really his name) vision was?
Let’s go back 10 years when only a small handful of folks knew about bitcoin, blockchain and all things crypto. Bitcoin goes from pennies to $20,000 and while making that trip, it certainly gets the attention of the global financial/investor/speculator/government and general retail communities. Wall Street sees a whole new financial class and a myriad of ways to make some money. With the inevitable “shake out” happening this year, institutional investors see a massive opportunity to enter the crypto market. Buy the dip as it were. And, sure enough, they are…..worldwide.
So, with virtually every established exchange (NYSE, CME Group, Cboe, etc) joining new ‘startup’ crypto exchanges (Coinbase, BitStamp, etc) and places like Switzerland, Gibraltar, the UK, etc. all creating favorable jurisdictions, the next leg up for bitcoin is set to begin.
With more liquidity being provided on exchanges, futures/options offering ways to hedge positions the volatility will be become less and less of a factor in bitcoin adaption. With prices becoming more stable, more uses will also present themselves (daily shopping, a latte, a haircut, etc). Could Wall Street actually be helping push Satoshi Nakamoto’s dream of a “Peer-to-Peer Electronic Cash System” come true? It certainly doesn’t hurt. The next 10 years should be really something.
Bill Taylor is Managing Partner at Fintek Capital & a frequent contributor to FintekNews