Crypto: The New Asset Class
When something new comes along, it's seldom adopted quickly. No matter how good it is, it can take time. But when it's something so revolutionary and turns things around so much, it can also be ahead of it's time and be harder for people to wrap their heads around. This seems to be the case with cryptocurrency.
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Those who are invested in the old and inferior way, try to maintain the dominance of the old way. But the new and better way gains more and more supporters as it's superiority is recognized. The old bankster grip on people, and nations themselves, is under threat. Traditional banking, investing and monetary police is being shaken up.
Crypto has made it's mark, and it's here to stay. What will it's future in regulation and governance be? That is yet to be determined. Regulators and governments have pushed against the crypto march for a while, but they are stubbornly being forced to accept the future they tried to ignore. Bankers and hedge funds are fast warming up to the crypto heat. If they don't jump on board, they might get left behind in the dust.
Cryptocurrency is emerging as a mainstream asset class that is captivating all generations, from young to old. If financial occupations want to move with the times, they need to adopt the crypto as an asset and get the new customers that are pouring onto the scene.
The old way of the stock market has a dirty taste in many mouths, given the decade-old financial crash. Something new is needed for the new generation to invest in that don't want to get into the tainted stock market. And here comes crypto to the rescue as the new mainstream asset class for investing. Daisuke Murayama, a former Barclays trader, says he "see a future in traditional finance", and has hopped over to Japanese Crypto Exchanges. There is a big shift on it's way, and some are ahead of the curve.
As more cryptocurrencies get adopted in business, it will become a cash equivalent. Some people don't trust bank, bonds, the stock market on many others modern ways to save or invest, and they have cash on hand, or better yet have invested it into the traditional safe haven of precious metals. But bitcoin is on the rise as a safe haven as well.
Bitcoin like precious metals, doesn't erode in value like fiat currency does with inflation as more is printed. Bitcoin has a finite amount that will be created. It is limited, and hard to create through mining. There is high risk in crypto, but the potential return is orders more than any investment in previous metals, a savings account, or the stock market can give you.
Crypto therefore has many different financial uses, despite regulators trying to pigeon hole it into one single classification, like a security. This is shortsighted though, as creating restrictions on it's use can hinder the potential for blockchain technology. It shouldn't be regulated or restricted. Let whatever it can be used for be used. If people want to make a foolish investment and, then they can lose their money. Let's say crypto is "all a scam", well we still don't need nanny-mommy-daddy- protectors treating us like babies in order to protect us if we want to make foolish decisions.
The future of crypto and how it can change society is interesting to think about. Will crypto win over the hearts of the media, bankers, investors and governments? Or will they try to restrict, limit and control the potential future we can have that crypto and blockchain technology can bring? Will bitcoin be a recognized financial term that doesn't illicit a negative response from people, as if it's a scam, bubble or other ideas to dismiss its value?
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I've said many times over the past year, that in 2-3 years, the entire global stock market will be one market and will trade 24/7 like cryptocurrencies do today.
With respect to your point about not needing regulation, I get what you say and what a lot of people are saying. But regulation will ultimately lead to a more ordered market and allow it to thrive. And, the SEC mandate is to protect people. Most people are ignorant. I'm sure many people have turned to the cryptos like gambling at a casino and have lost their shirt in this massive correction since February. We are not the average ignorant investor. I think there is a place for some basic regulation.
I expect later this year that China finally releases their new regulation they are working on. When this happens and the Chinese are able to once again invest, there will be a firehose of demand injected into the cryptocurrency market. They are currently working on creating an entire digital economy on blockchain. I'm deep in the weeds. I subscribe to an expensive financial newsletter focused on blockchain investments. This new technology is rewriting the way business and world will function. It's an exciting time regardless of if bitcoin or the whole cryptocurrency market is down. It won't be long before real blockchain businesses and applications will drive their own demand and valuations.
I totally second your point about regulation. When I read @krnel:
I immediately thought of the repeal of Glass-Steagall and all the arguments from financials for less regulation which we've heard since.
The banking system is already a significantly regulated industry that functions in an orderly fashion. With respect to the repeal of Glass-Steagall for small to mid tier banks, this will take off the handcuffs when all the banks were lumped into one bucket. The cost to small and midsize banks to meet the same requirements of the large banks held them back. Now they will be more free and watch the small and mid sized banks undergo a bunch of M&A with their newfound freedom.
Well said, yes. I think that it would need some SEC type regulation to an extent. But regulation isn't always a great thing. It typically means fees, taxes and other people trying to take your money. There are certainly pros and cons to it. It's more adopted and more people know about it but with that inevitably comes them stealing your money.
Blockchain technology though, aside from crypto, would be fantastic to see in many more avenues. There are great implications for it in the financial sector yes, but also in other sectors as well. I envision it could help the healthcare system and once I learn more about it I will be able to formulate a decent hypothesis on what it could do.
Just like banning crypto, regulation will not work in the long run. Both require worldwide consensus. That's never going to happen. The establishment wants to add friction to this revolutionary technology by taxing and regulating it. No surprise there. Money money money greed.
The problem with this is that other countries are going to respond by not adding any friction to the system at all. These countries will see huge benefit from their decision to embrace crypto with no strings attached. Crypto is corruption resistant and rewards good behavior.
These visionary countries will be able to create frictionless platforms on top of a frictionless foundation. In turn, they can build even more frictionless applications on top of the frictionless platforms. The end result is going to be a completely efficient and fluid ecosystem where everyone benefits. This end result is impossible with the added red tape of regulation.
Countries that choose greedy short term gains over the awesome power of cooperative capitalism are going to get left in the dust. Now that everyone is actually paying attention because Bitcoin hit 20k, the blockchain has the power to radically shift the balance of economics worldwide within 20 years. Never before has an open source project had the means to fund itself and every other open source project.
Regulation will not allow crypto to thrive, it will stifle it. It will pump the market with dirty money from the old corrupt system that we should want nothing to do with. It will add friction to a perpetual motion machine. I support regulation because America doesn't deserve to be a world power anymore. Regulation will ultimately funnel wealth into the hands of the communities that saw the value of cooperation over greed.
I get your point about regulation relative to other countries if we do more of it then other countries. However, there is too much money in the future of blockchain and the cryptocurrency market and too much risk of being locked outside this market. I don't know of any sizable country who is considering no level of regulation. I also don't agree that regulation requires worldwide consensus. Instead, one government will make a move and the others will watch and adopt the parts that work. There is zero chance any meaningfully developed country lets the crypto market freely build. That's simply a fantasy.
The other point, is that institutional money will only flow into crypto market en masse when there is some order to the market. They won't just enter to gamble. That is what will set this market on it's multi-trillion dollar expansion. The first step was to approve the futures and options markets last year. This allows institutional investors to hedge their portfolios, which is required. Next is for large financial institutions to hold actual cryptos on behalf of their clients, called custodian service. Finally, without some sort of ICO regulation, all the big money will bi-pass these and go to direct funding of the business (blockchains), which is happening now. June 11th.
Update: June 12th.
Here's a small quote from Dr. Smith, a PhD mathematician who is the founder of TradesStops service, who wrote an article on this topic today:
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Nice response. I agree to an extent. Sometimes I like to go full idealist. I'd like to think that blockchain can self-regulate. It's already been demonstrated that blockchains for a platform of voting and government are a real possibility. Just look at DPOS.
Yeah, blockchain and crypto are lined but not exclusively connected. Blockchain is going to change many things regardless of cryptos success.
Those who say that Cryptocurrency has no future like the one who puts his hands on his eyes and says that there is darkness...
He doesn't want to see the light or he's afraid to see the light...
Same thing with encryption...
Who controls the world economy don't want people to know that there is something revolutionary called Cryptocurrency...
Because this will threaten their domination of the world...
And for that, they're trying to put their hands on their eyes so the world can't find out there's a light of Cryptocurrency...
no matter how they try to hide this from the world... Cryptocurrency will be the future because it's stronger than their selfishness.
yes, the want to keep control and dominate, but if they create their own soon, people will flock to that instead of the non-nationalized cryptos... so many people are still brainwashed :/
I think that although crypto and blockchain technology is fantastic for the common person and those who like to know information is public, traceable and accessible, the larger organizations will despise it. It's a way that one can trace a transaction and who it came from and who it goes to (from my newbie understanding at this point at least this is how I think it works). Do you think the Pentagon, after "losing" 21 trillion dollars would like an official trail where anyone can look to see the transactions? Absolutely!....not
I love the fact that I can have a coin and be anywhere in the world, trade it to someone that also values the coin and get goods without having to report any of it to the government. The money that I make investments in is my money, no-one elses.
Yeah, corps and authorities will want to make their own private chains, they aren't interested in the current cryptos lol. What about making corps as publicly traded companies, and governments a public orgs, forced to use public chains for their operations so that they could be trusted? That would help make the world more honest :) :) :)
Man would that be hilarious because things would get changed real quick!
great point highlighted in the article and must read for anyone new getting into cryptos.
Crypto has to a great extent already won the hearts of media. There is a lot of hype around the large gains that bitcoin made last year and hype helps sell news and draws viewership. There media should have nothing to complain about.
Government will fall in love, when those funding governments fall in love - investors and bankers.
Investors are curious and i believe have become more aware of the asset class. They understand something big is in the making and are, in my opinion pushing govt to pass regulation. It represents a new asset class for them, inflation proof, 0 correlation to traditional assets. Therefore they will ultimately fall in love.
Bankers, well they are of two kinds - boring retail guys and the assholes (aka investment bankers). The second type will actually develop a business around trading of the asset class, its custody and build a financial derivative market around it. So they can smell money here and having seen the profit numbers for coinbase, and binance, their mouths are already salivating for the big feast ahead.
The real threat is to retail guys, as the average person no longer needs a bank to be the custodian of its wealth.
Once the infrastructure is in place for big money and banks to get involved, the whole scam, bubble crap will end.
Economists will keep theorizing about it being good or bad, as they do about other things without having any meaning impact on anyone's life.
Yeah great... more money manipulated assholes who play around with bullsiht like derivatives... great... :/
:) unfortunately most in crypto are excited about it. But then it does not change the phenomenal achievement bitcoin is.
The great thing about the Cryptocurrency is, it's core is Decentralisation and decentralisation can be speculated, discouraged and can be demotivated but it cannot stopped because their is no central to stop so, from here we can see one way and that is moving forward, and in my opinion this doesn't mean that we will face always profits, Crypto will hold it's volatile nature because it's all about the inflow and outflow of investments.
We are hearing speculative words towards Crypto because the central entities are fearing about their business, control and power because they know that this can possibly remove their domination in the world, i don't know about them but Cryptocurrency and Blockchain Technology in combination is Revolutionary phase and it's power to commoners. Let's hope for the best.
Thanks for sharing this post with us and wishing you an great day. Stay blessed. 🙂
Good points, decentralized means they can't control the chains, but only the exchanges. They want control though like you say, money rules the world ;) Blockchain has a lot of potential outside of crypto too, indeed.
We can use Blockchain for any use it's just matter of ideas, and in my opinion Blockchain can be used for the Political Voting in future. Stay blessed. 🙂
Crypto is on the verge of mainstream adoption. The biggest problem with it is that no one truely understands decentralized cooperative economies. We don't quite comprehend the strengths and limitations yet because it is such a foreign concept.
In my mind, leadership and organization are the most important aspects of crypto. It's hard to build good decentralized platforms that also have these qualities. We're used to this not being a big deal because of our centralized history.
The blockchain community is going to have to get very creative and innovative to overcome the weaknesses of decentralization. When we finally do mitigate this dilemma the true power of the blockchain will be unleashed.
Its true that bitcoin has a limited number but now we have constantly growing list of coins with huge supply. Bitcoin is not like gold really. Gold is finite. Bitcoin is code, you fork it and change the number.
Yes that's true, It could be forked to not have limited supply... the value would change...
On my mind right now is yesterday's article from CoinDesk's Michael Casey about how bitcoin, whilst uncorrelated with the market is not such as to be insulated from the downturns. I've been wondering about that for a little while now. Crypto as an haven for storing value in times of global financial trouble has yet to go through an actual test. Cyprus was a microcosm.
Blockchain is here to stay. It's still on testing mode.
Unfortunately, crashes or sell-offs like today's put fear into new crypto community members as well. On the brighter side, miners and steemians are able to cushion the fall by allowing us to generate crypto daily.
I believe it has. Privacy coins, ICO's, illegal mining ops are now under the radar more so than BTC itself. I think we will be fine...
On the moon! #NowFollowing