The current bear market dominates the public discourse. It is debated how long the summer hole will last, when Bitcoin ETFs will be approved by the US Securities Regulatory Commission. The big narratives like “Be your own bank”, “Banking the Unbanked” or “Peer-to-Peer-Payments” move into the background, into the back rooms of some nerds – too bad!
Especially in the bear market, it is important to move away from the cryptoportfolio and see what the crypto-economy is actually good for, what its fundamental strength is. Even for those who are primarily in the crypto sector for investment reasons, this view is worthwhile. In the face of market activity, the core competences of economics are swept under the carpet. A mistake, because especially investors should be familiar with the narratives of Bitcoin & Co., but contribute significantly to their value and value proposition.
Rather than wondering if you would rather invest directly in Bitcoin futures, derivatives or bitcoin, you should consider what the current situation from a fundamental perspective means for the crypto market. What happens with regard to second-layer solutions such as Lightning, what is the hashing power at Bitcoin or what is the effect of adapting the acceptance points? All these questions are mandatory for exit from the bear market and the entry into a long-term, fundamentally justified increase in the value of cryptocurrencies. Only when blockchain technology is convincing, public awareness is created, and regulatory frameworks allow a functional market.
Where value really arises
Although investors and traders ensure liquidity, they are hardly involved in the further development of the crypto-economy. Innovation and adaptation is only partly possible on the crypto exchanges. Substance, in the sense of real added value or fundamental value, cannot be created on the financial markets, but can only be depicted and traded. Substance is created outside the financial markets. In order for prices to rise, people need to use cryptocurrencies, create use cases, and overcome technological hurdles.
Instead of calling the bank and asking for Bitcoin financial products, it might be worth asking at your favourite restaurant or café if Bitcoin is accepted. In most cases the answer will be “no”. It was worth it anyway, as a demand was signalled. The more people create demand, the sooner traders will get the idea of accepting cryptocurrencies. At this micro level, everyone can help build the next rally on the crypto market . Especially in the bear market, where transaction costs are low and transaction times are fast, the argument of peer-to-peer technology is as obvious as it has long been.