There was a time when all cryptocurrencies were traded against Bitcoin (BTC). When speculators see solid token economics or promising hype, they venture into other coins, but Bitcoin is their settlement coin of choice.
Things have changed. Stablecoins now form a key pillar of the $150 billion cryptocurrency market. Perpetual futures over-amplify market sentiment and tend to dominate price action. Recently, more funds, including institutional funds, have entered the market and have had little impact on the price of Bitcoin. As a result, some former bulls now think Bitcoin is boring.
Is this the end of Bitcoin minimalism? maybe not. But, perhaps, it's time for more realism.
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Bitcoin in a sea of memes
Just as Disney stock can hold value next to gold, new digitally native names like non-fungible token (NFT) project Bored Ape Yacht Club (BAYC) can keep pace with Bitcoin in the digital asset space. And, just as investors were willing to acquire the rights to the nearly century-old Mickey Mouse, BAYC represents a new approach to brand building. And, it works.
It probably won't, though. It's speculative, which is what traders like.
ApeCoin (APE) is not as volatile as Bitcoin is today. Orangutan tracks brand hype while Bitcoin now trades against a macroeconomic backdrop. Arguably, Bitcoin is consolidating as a core asset, not just in the digital asset space, but even among some intrepid institutional investors — who typically shy away from volatility. Bitcoin is the established base layer of the digital asset market, but will it also be the ultimate reserve asset?
In all fairness, we see sovereign wealth funds not starting to hold Ripple (XRP), Shiba Inu (SHIB) or Bitcoin Cash (BCH). There are no serious retirement funds to pick them up either. Realists argue that Bitcoin differs from its competitors because it has proven itself resilient through multiple crises, and because it is truly decentralized and beyond the control of any single government.
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Bitcoin for Baby Boomers
From a price perspective, Bitcoin is only boring for those who crave the speculative trading roller coaster. As this interest emerges elsewhere, Bitcoin is growing, which in itself can unlock more growth.
As YouTube influencers go from farming and breeding to staking and minting, are we also seeing conversations about Bitcoin becoming more mature and focused on first principles?
No, we are not seeing $100,000 Bitcoin in 2021. But do we really need to be that greedy when we haven't even hit 5% global adoption? Yes, in a less boring world, Bitcoin could benefit from human greed and speculation — like all investments — but those same impulses can cause any asset to plummet in value.
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bitcoin takes time
Bitcoin maximalists generally want to own enough bitcoins to do good for themselves in time and space. They may also want to see a fair and more just economy - hence their support for Bitcoin in the first place. An extremist should also agree that seeing billions of people holding a little bit of Bitcoin is better than seeing millions of people holding all of it.
In fact, not only are dip-buying moments useful to those most loyal to Bitcoin, but they also help further distribution as new entrants are attracted to buying opportunities. This is a good thing.
In this regard, it's helpful to ask yourself how much bitcoin you think you should own or aim for. Then act accordingly.
It took most staunch Bitcoiners, including Michael Saylor, time—perhaps years—to arrive at their inspiring views. Famed financier Ray Dalio is still evolving. Most politicians know next to nothing about bitcoin, and I have to assume that sometimes El Salvador's president, Nayib Bukele, gets nervous staring at the charts as he makes bitcoin legal tender in his country.
Related: Bitcoin Laws in El Salvador: Learn Alternatives to Government Intervention
Anyone entering the cryptocurrency space for the first time, as a funny dog or pixelated primate reveals itself as a hypersonic asset, also takes time — a lot of time. However, the end result doesn't have to be Bitcoin's minimalism.
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Too poisonous?
Some say Bitcoin maximalists are toxic. However, people are toxic everywhere. And, what maximalists in Bitcoin do well is restate first principles, which help anchor the conversation. Their motto is, Bitcoin doesn't need you, you need Bitcoin. real? Well, true or not, here's the point: don't deposit your life savings in memecoin just because the community has been nice to you.
Let's be real. The world is dealing with currency debasement, bitcoin mining can and does serve environmental goals, the US and its allies did freeze Russia's foreign exchange reserves, the future is highly digital, inflation is not temporary, hold bitcoin in any of these circumstances would make complete sense.
Bear markets show what projects and protocols are really made of. Axie Infinity's Smooth Love Potion (SLP) token is currently trading about 40 times below its all-time high. The price of Bitcoin is about 2 times lower than its all-time high. An early break above $69,000 is not unreasonable, or even unusual.
In the end, it's a bit of an oxymoron for banks to "get into Bitcoin," and some might argue that Bitcoin doesn't need that, but it's equally realistic that Bitcoin's integration with global finance and existing infrastructure makes the asset more resilient because it brings More stakeholders who will invest in the long term.
No one needs to be a Bitcoin maximalist, but everyone should be a realist.
This article does not contain investment advice or advice. Every investment and trading action involves risk and readers should do their own research when making a decision.
The views, ideas and opinions expressed here are solely those of the authors and do not necessarily reflect or represent the views and opinions of the authors.
Ben Caselin is Head of Research and Strategy at AAX, the cryptocurrency exchange powered by London Stock Exchange Group's LSEG technology. With a background in creative arts, social studies and fintech, Ben has an in-depth understanding of Bitcoin and decentralized finance and provides strategic direction for AAX. He is also a staff member of Global Digital Finance (GDF), a leading industry body dedicated to driving the acceleration and adoption of digital finance.
This article first appeared on: Сointеlе graph
