Bitcoin has recently been making headlines for all the wrong reasons. The last 30 days, Bitcoin price has experienced -20% + in losses. In a recent market report by VF, Bitcoin price was considered in undervalued territory based on historical technicals. For years now, critics of BTC have called it a bubble. However, this claim has not panned out how the critics would have hoped. Here are some reasons why Bitcoin might be maturing despite its current price slump.
The Entry of Institutional-Grade Investors
One good sign that BTC is maturing is the launch of Bitcoin futures. A recent paper by BitWise, average daily trading volume in the futures market was $234,2285,300. Besides that, the percentage of the futures market compared to spot trading volumes grew from 10% in Q1 2018 to more than 20% in 2019 August. This indicates increased interest from speculators who may not want to directly own BTC.
Bitcoin Has Outlasted All Other Market Bubbles
Many critics of BTC claim it is a bubble. However, this has not yet happened. Most market bubbles do not last for more than three years. If Bitcoin were a bubble, it would be one of the longest-running bubbles, having been around for a decade. Besides that, its value has grown from just a few million to billions of dollars in that period.
Bitcoin is the Fastest Growing Currency Globally
Bitcoin is one of the largest currencies in the world, even when compared to fiat currencies. If Bitcoin was a nation, it would be one of the wealthiest nations on earth in terms of GDP. Today, Bitcoin is worth more than the New Zealand Dollar and other major currencies. The best part about this is that the coin still has room to grow since its user base is relatively small.
It is Much Safer to Deal in the Coin Today
As institutions such as Bakkt enter the crypto space, investors are feeling more confident about the safety of their investment. For one, these institutions are regulated and are in full compliance with the law. As reputable institutions such as the CME Group enter the crypto space, it will continue to lend legitimacy to BTC and attract more investors. We still believe that Bakkt will have a large impact, but not right away. Many institutional investors are sitting on the sidelines just assessing the atmosphere right now. As sentiment grows in Bitcoin, you will see Bakkt playing a larger role, since big money is now a few clicks away from entering the markets. The best way to think of Bakkt is like the traditional IPO markets. There is always that group of investors that jump in right away, but a majority of investors sit on the sidelines to see how things pan out.
It Has Better ROI than the Top Tech Firms
A good sign that Bitcoin is maturing is the ROI it has offered investors since it was launched. Those who invested in BTC when it was worth just a few dollars have seen a better ROI than if they had invested in the largest and hottest tech firms in existence today. It is especially so if they decided to hold onto their coins in the last decade. For instance, if you invested in Bitcoin in 2012, your investment would have grown by 199,527% by 2019. Even the best tech firms haven’t come close to matching these long-term figures.
Summary
In short, Bitcoin investors have been swimming in cash. It is also quite easy to convert your BTC investments into fiat cash, which is at times not possible with stocks. When you examine the facts carefully, you can only conclude that BTC is maturing. Those that say otherwise must study the adoption curves in tech. Most of the game changing tech this world has seen has taken 20+ years to mature and capture mass adoption.
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