Its December 2017, crypto markets with Bitcoin as the unrivalled king is marking its place, putting its mark on the planet, touching a milestone of 20k USD, Ethereum a distant cousin with an independent background too is rivalling the champion, only to be rattled down to its lows, wiping the investors gains and killing the confidence amongst many, at the same time evolving the theories of this being a ponzi scheme, of getting money from the poor, an extortion racket luring innocent millennials, trying their luck to become the next under 30 billionaires.
Several cryptocurrency advocates tried pacification through various channels, videos, blogs and discussions on how the crypto as its called is an alternative to fiat. Many followed their passions and kept their holdings intact, their conviction was stronger, the ones who understood the logic and functioning of mining knew it for sure, its near impossible to control the accumulation of BTC without driving the prices, which is essentially how any commodity in markets would be driven. Many saw this as an opportunity to invest and get in at a lower price, they werent outspoken about their investments, but they didnt want to miss-out on the raging bull charging and shaping its horns to strike all the bears.
Enter 2020 the pandemic year, most of the savings disappeared, loss of job, loss of connection and a lockdown to worsen the insecurities, the governments trying their best, people making the best out of what they had. Enter BTC giving many hope, as a new asset class, raging its bulls and joining its all time high, only to beat it some time later and gaining new heights, the faith in crypto getting stronger many more coming in, platforms booming, confidence building, business growing.
The Sharpest difference between the prior bull run and this one is that this time its not just retail alone riding it. Some of the biggest firms have significant holdings in crypto. People may not believe in Bitcoin and Ethereum as currencies but they do believe in it being an asset. Afterall whats a diamond or a pearl without the want to flaunt it and hold it, its almost nothing. Its value is determined by what people are willing to shell out to own it. Same holds true for the former too.
The disconnect however lies in the branding and marketing efforts on gaining more traction and engagement in the community. Many advocates of blockchain have come-out to educate the masses of why crypto is safe, and why it holds value and how it works, though in the effort to spread awareness the technicalities and the beauty of blockchain based assets shouldnt be compromised. The real value of an asset is built by the institutions who have better reach with the audience, any effort which ignores them as being one of the major stakeholders in the ecosystem will result in lower yields and more often than not no yield at all.
Institutions and corporate houses demand a different approach for gaining knowledge and confidence in the system, while many in the industry get wooed by the crazy raps and memes about crypto, many market movers and shakers in the wall and dalal street continue to view it as a child’s playground, playing gamble over the hard earned money or in all seriousness a hobby. Of course they have a point, most of them never saw such “meme culture” based outreach associated with investments. Investments is about putting hard earned money to work its way out, in order to have a comfortable life later. Its a way of making the money work for you, in such a scenario why would a person invest in a campaign which is built around having fun ? Or its built around jokes and entertainment. Instead it should be talking about the value and growth potential while also explaining the risks.
Continuing the point, many treat crypto-trading & investments as a primary income source, its no longer a fun activity for them, its something that feeds their belly and meets the securities financially, when you are in the business of making money, the elements of fun have to minimised and components of seriousness and discipline has to be invoked.
The rise of youtube videos and memes on social media has brought about a stronger push in the retailers but lacks a pull for the institutions.
There is a need of realignment with the changing dynamics of the industry, the industry has to grow its breadth, and penetrate the conventional markets space, for facilitating their entry into these markets, outreach and campaigns need to be built through their mindset, products and instruments too need to built keeping up with their requirements, the next phase of participation in liquidity, speculation and adoption would be built by them, they would ensure lower risks and price stability across the assets, at the same time their expertise on avoiding “con projects” and bogus token would definitely be another value add for the system. The point about people with big pockets coming in and taking away the value from the middle class doesnt make a lot of sense here, the most distinguishing factor here is that institutions are invited by retailers instead of institutions bringing in retailers.
PS
- Best regulation is self regulation which is backed by govt, this post isnt about it
- Cryptocurrency vs Crypto-asset is not the scope of this snippet either
