Bitcoin usage: how far are we on the way to mass adoption?

Over the past few years, Bitcoin has been evolving at a rapid pace, despite its massive volatility in price. While we are nowhere near the prior all-time high, the industry looks significantly different than it did just a couple of years ago.

Solely but surely, a large number of financial services is slowly making its way into the crypto industry. High-yield savings accounts, crypto debit cards, leverage trading, and even cryptocurrency loans.

Once again, we are witnessing a slow buildup of demand, as more people buy Bitcoin and other cryptocurrencies in hopes of making a large profit. The golden question and the one most can’t answer with certainty, is “how much longer until mainstream adoption?”. After all, the long-awaited 6-figure Bitcoin should be tied by global adoption of BTC as an easier store of value compared to more traditional options (gold, stocks, etc.)

In the following chapters, we will briefly discuss the current industry outlook. We will also discuss how these developments have changed the way people see and use Bitcoin in their day to day lives. Let’s get started.

Institutions are finally taking notice

Many analysts have predicted that Bitcoin’s price would experience its next bull run as soon as institutions start buying. In 2020, due to the pandemic-related economic uncertainties, we are finally seeing this prediction come to fruition. Several companies (among which a few public companies) have already invested a significant amount of their cash reserves into Bitcoin. These are:

1. Grayscale Trust – Holds 2,14% of the total Bitcoin supply.
2. Microstrategy – Holds 0,18% of the total Bitcoin supply.
3. Square – Holds 0,022% of the total Bitcoin supply.
4. 3iQ the Bitcoin fund – Holds 0,04% of the total Bitcoin supply.
5. Coinshares – Holds 0,33% of the total Bitcoin supply.
6. Voyager Digital – Holds 0,006% of the total Bitcoin supply.
7. Digital X – Holds 0,001% of the total Bitcoin supply.
8. Cypherpunk Holdings – Holds 0,001% of the total Bitcoin supply.

The companies above hold some of the largest amounts of Bitcoin in the world at the time of this writing. They are currently allocating their funds to the popular cryptocurrency to avoid potential measures of quantitative easing, and to escape the massive inflation numbers that were caused earlier this year, through the uncontrolled printing of several trillions of dollars.

We expect many more companies to follow the steps of the 8 examples we shared above as the trend starts to build up. With more companies showing interest in Bitcoin, we can expect to see a massive increase in demand in the short to mid-term future.

Cryptocurrency exchanges vs banks – the line is becoming thinner

As of 2020, Kraken became the first cryptocurrency exchange amongst many that managed to acquire a US banking license. The United States, which has maintained a somewhat negative stance against cryptocurrencies, seems to be changing its position against Bitcoin.

With Kraken offering a number of financial services locally and plans to expand globally, cryptocurrencies are slowly merging with the traditional financial system. 2020 can be seen a “bridge year” with a heavy focus on awareness for blockchain projects.

While, at the moment, traditional financial structures tend to show a preference for Stablecoins, we can expect Bitcoin to become more important as a store of value as well. By becoming more familiar with the concept of cryptocurrency, the average consumer will eventually start exploring the digital asset for its investment performance and eventually add a small position to their portfolio.

Crypto companies going public

Another trail of success lies in the sharp growth of several crypto-related companies. More specifically, Coinbase, BlockFi and DCG are planning to go public (host their IPO) within 2021, becoming the first “unicorns” in the crypto industry.

Ryan Selkis, co-founder of crypto research firm Messari, commented on the news as well.

<blockquote class=”twitter-tweet”><p lang=”en” dir=”ltr”>My money is on three U.S. crypto unicorns going public in 2021, Coinbase, DCG, and BlockFi ($1bn at IPO?)<br><br>Of the three, Coinbase may be the most interesting bellweather for public market crypto appetite as it&#39;s the only one that&#39;s likely down from 2018 revenue.<br><br>Thoughts?</p>&mdash; Ryan Selkis (@twobitidiot) <a href=”https://twitter.com/twobitidiot/status/1316410875205517312?ref_src=twsrc%5Etfw”>October 14, 2020</a></blockquote> <script async src=”https://platform.twitter.com/widgets.js” charset=”utf-8″></script>

But what does this mean for the market as a whole? Many investors are thoughtful about the news. Having three large crypto-companies going public could signal the development of small-scale monopolies for new cryptocurrency projects, all of which will belong under the umbrella of a parent organization. The trend that we are already seeing with Binance (Binance-owned companies having successful IEOs) could soon be replicated by Coinbase as well. If this stands to become true, we will see more structure but less freedom in the development of new crypto projects.

Economic uncertainty in 2020

And finally, Bitcoin’s usage has seen a dramatic growth due to the pandemic-related lockdown measures. With economic uncertainty reminding us of the 2008 crisis, many people are starting to diversify their wealth in order to protect themselves from a potential financial collapse.

When looking at Bitcoin’s performance during March of 2020 (when the WHO announced that COVID19 is a pandemic), we can see that Bitcoin experienced a sharp but brief drop to the $4000 levels (-60%) following the stock market closely. However, it quickly recovered and surpassed its yearly top within the summer of the same year, proving that it is not connected with other investment markets.

With the short-term future looking bleak, we could see more people become HODLers and welcoming Bitcoin into their life. If another lockdown occurs, there is a high chance that the uncontrollable money-printing practises of the US governments (and thus the rates of inflation) will continue to increase.

So, what does this all tell us? 2020 was certainly an eventful year, but one that was much needed for Bitcoin to prove its position in the market. With mass adoption and consumer usage increasing daily, Bitcoin could be standing right before a new all-time high.

Over the past few years, Bitcoin has been evolving at a rapid pace, despite its massive volatility in price. While we are nowhere near the prior all-time high, the industry looks significantly different than it did just a couple of years ago.

Solely but surely, a large number of financial services is slowly making its way into the crypto industry. High-yield savings accounts, crypto debit cards, leverage trading, and even cryptocurrency loans.

Once again, we are witnessing a slow buildup of demand, as more people buy Bitcoin and other cryptocurrencies in hopes of making a large profit. The golden question and the one most can’t answer with certainty, is “how much longer until mainstream adoption?”. After all, the long-awaited 6-figure Bitcoin should be tied by global adoption of BTC as an easier store of value compared to more traditional options (gold, stocks, etc.)

In the following chapters, we will briefly discuss the current industry outlook. We will also discuss how these developments have changed the way people see and use Bitcoin in their day to day lives. Let’s get started.

Institutions are finally taking notice

Many analysts have predicted that Bitcoin’s price would experience its next bull run as soon as institutions start buying. In 2020, due to the pandemic-related economic uncertainties, we are finally seeing this prediction come to fruition. Several companies (among which a few public companies) have already invested a significant amount of their cash reserves into Bitcoin. These are:

1. Grayscale Trust – Holds 2,14% of the total Bitcoin supply.
2. Microstrategy – Holds 0,18% of the total Bitcoin supply.
3. Square – Holds 0,022% of the total Bitcoin supply.
4. 3iQ the Bitcoin fund – Holds 0,04% of the total Bitcoin supply.
5. Coinshares – Holds 0,33% of the total Bitcoin supply.
6. Voyager Digital – Holds 0,006% of the total Bitcoin supply.
7. Digital X – Holds 0,001% of the total Bitcoin supply.
8. Cypherpunk Holdings – Holds 0,001% of the total Bitcoin supply.

The companies above hold some of the largest amounts of Bitcoin in the world at the time of this writing. They are currently allocating their funds to the popular cryptocurrency to avoid potential measures of quantitative easing, and to escape the massive inflation numbers that were caused earlier this year, through the uncontrolled printing of several trillions of dollars.

We expect many more companies to follow the steps of the 8 examples we shared above as the trend starts to build up. With more companies showing interest in Bitcoin, we can expect to see a massive increase in demand in the short to mid-term future.

Cryptocurrency exchanges vs banks – the line is becoming thinner

As of 2020, Kraken became the first cryptocurrency exchange amongst many that managed to acquire a US banking license. The United States, which has maintained a somewhat negative stance against cryptocurrencies, seems to be changing its position against Bitcoin.

With Kraken offering a number of financial services locally and plans to expand globally, cryptocurrencies are slowly merging with the traditional financial system. 2020 can be seen a “bridge year” with a heavy focus on awareness for blockchain projects.

While, at the moment, traditional financial structures tend to show a preference for Stablecoins, we can expect Bitcoin to become more important as a store of value as well. By becoming more familiar with the concept of cryptocurrency, the average consumer will eventually start exploring the digital asset for its investment performance and eventually add a small position to their portfolio.

Crypto companies going public

Another trail of success lies in the sharp growth of several crypto-related companies. More specifically, Coinbase, BlockFi and DCG are planning to go public (host their IPO) within 2021, becoming the first “unicorns” in the crypto industry.

Ryan Selkis, co-founder of crypto research firm Messari, commented on the news as well.

<blockquote class=”twitter-tweet”><p lang=”en” dir=”ltr”>My money is on three U.S. crypto unicorns going public in 2021, Coinbase, DCG, and BlockFi ($1bn at IPO?)<br><br>Of the three, Coinbase may be the most interesting bellweather for public market crypto appetite as it&#39;s the only one that&#39;s likely down from 2018 revenue.<br><br>Thoughts?</p>&mdash; Ryan Selkis (@twobitidiot)

But what does this mean for the market as a whole? Many investors are thoughtful about the news. Having three large crypto-companies going public could signal the development of small-scale monopolies for new cryptocurrency projects, all of which will belong under the umbrella of a parent organization. The trend that we are already seeing with Binance (Binance-owned companies having successful IEOs) could soon be replicated by Coinbase as well. If this stands to become true, we will see more structure but less freedom in the development of new crypto projects.

Economic uncertainty in 2020

And finally, Bitcoin’s usage has seen a dramatic growth due to the pandemic-related lockdown measures. With economic uncertainty reminding us of the 2008 crisis, many people are starting to diversify their wealth in order to protect themselves from a potential financial collapse.

When looking at Bitcoin’s performance during March of 2020 (when the WHO announced that COVID19 is a pandemic), we can see that Bitcoin experienced a sharp but brief drop to the $4000 levels (-60%) following the stock market closely. However, it quickly recovered and surpassed its yearly top within the summer of the same year, proving that it is not connected with other investment markets.

With the short-term future looking bleak, we could see more people become HODLers and welcoming Bitcoin into their life. If another lockdown occurs, there is a high chance that the uncontrollable money-printing practises of the US governments (and thus the rates of inflation) will continue to increase.

So, what does this all tell us? 2020 was certainly an eventful year, but one that was much needed for Bitcoin to prove its position in the market. With mass adoption and consumer usage increasing daily, Bitcoin could be standing right before a new all-time high.