A bullish reversal is underway in cryptocurrency markets, and now we are starting to see institutions shift money into the space. This is likely in anticipation of another bullish run, similar to the one that occurred in 2017.
In addition to renewed interest in the sector, further proof is emerging that protocols like Bitcoin are serving a purpose that is in demand. With 400 million transactions having been executed on the platform at this point, it is hard to deny that there is a need for decentralized and low-fee transactions that are unable to be censored.
Bitcoin’s Unique Investors
One thing that makes cryptocurrency different than nearly every other investment is the order in which it attracted investors. Normally, you see a company or asset class come along, and the banks snatch it up as soon as they see the potential of it. They then market it to their larger institutional clients, who generally have a greater appetite for risk. Only later on does it hit the retail markets where the layman can get in and start experiencing the returns.
Bitcoin works in the exact opposite manner, with retail investors getting a jump of almost a decade on institutional investors because of the unconventional nature of its custody and investment thesis. Only now are we seeing institutions start to snatch up cryptocurrencies (both Bitcoin and altcoins), and the price of Bitcoin is beginning to reflect this.
In some cases, this reflects a complete reversal of positions, like how JP Morgan’s CEO, Jamie Dimon, spent years belittling cryptocurrencies only to now release their own. But there are also companies like Fidelity Investments, a well-trusted investor services company, who are enabling crypto custodian services.
There are already numerous brokers and exchanges in place, but with major companies like Fidelity enabling their 20,000 institutional clients simpler access to the space, and E*Trade and TD Ameritrade planning to offer crypto trading soon, it will be easier than ever to get into crypto.
Part of this sentiment shift is coming from the fact that significant developments have occurred during the down period of the last year. The anti-crypto crowd used to refer to investing in Bitcoin as falling for the same trap of tulip bulb speculation bubble of the 1600’s, yet now the developments becoming undeniable.
Helping Address Income Inequality
Compared to every other type of technology investment, only cryptocurrencies are open to all to invest in from the very beginning. This means they have far less of an opportunity to create wealth opportunity, since they are accessible by non-accredited investors right away.
When you look at the massive returns that major tech IPOs have earned their venture-capital backers, it is lamentable that no one else was able to benefit from investing in these earlier. This is the nature of closed networks which are dependent upon who you know or how much money you have, and is exactly why we need to find different ways to spread out the wealth more naturally.
Bitcoin is the only investment which has returned approximately 100,000% to retail investors, which makes it a power in favour of wealth equality rather than inequality. Parabolic appreciation of wealth may be something we considered to be unreachable for the masses, but hopefully Bitcoin is the beginning of a whole new asset class that changes that.