How Cryptocurrency’s Price Speculation Overshadows Its True Potential 加密货币的价格覆盖了它的真实潜力
Blockchain is one of the most defining technologies for the past decade. However, will we ever see the realisation of its full potential? 区块链是过去十年中最具定义性的技术之一。但是，我们能否看到它的潜力实现？
Cryptocurrency market action and recent halving events are topics guaranteed to generate headlines and media discussion and that often overshadow the importance of blockchain as a technology. Cryptocurrencies are known to have an extremely volatile nature, and in addition to the recent bitcoin halving, many speculated that BTC price is going on a bull run.
Don’t get me wrong, drastic movements in prices are definitely exciting for investors and those who wish to make a quick profit. Cryptocurrency’s growth in value and popularity has established itself as an asset class that attracts accredited investors. However, the increased focus and attention on the price movements of cryptocurrencies seem to be opposing what cryptocurrencies are supposed to be.
Will cryptocurrencies be adopted as a fiat currency alternative in the future or will it evolve into just another alternative asset class?
Based on the current state of the market, the focus on price seems to be pushing the cryptocurrency into the direction of an asset class.
Speculating and emphasis on the prices of cryptocurrencies will undermine its original use case, as mainstream businesses and normal consumers will feel uncertain and uncomfortable of the volatility in the cryptocurrency market.
Why would businesses and consumers be willing to take the risk and transact with cryptocurrency when current payment systems are deemed secured and convenient?
Although Bitcoin has gone through various updates and development to make it more user friendly, the process of transacting in cryptocurrency is still cumbersome to users as compared to existing infrastructures.
Positive news for the cryptocurrency community like the sudden bull run during the end of 2017 has led to slower and more costly transactions on the blockchain network. To counter this, most projects like Bitcoin underwent forks to update the network but that means it will further complicate things and be confusing for cryptocurrency beginners.
Speculating on price and market movements, in the long run, will be detrimental to the potential use case of cryptocurrency being used for daily payments.
With an increasing number of institutional investors venturing into cryptocurrency, crypto assets will become more embedded in the mainstream financial system. Alternative assets play an important role for investors to hedge against the traditional market and protect themselves against inflation. Bitcoin may have been the tip of the proverbial iceberg with regards to blockchain awareness, but that might have undermined its initial use case.
There is an enormous addressable market for alternative assets, and that is a market that cryptocurrency seems well-positioned to address. As this market becomes increasingly populated by cryptocurrency, reporting and disclosure standards will improve and that will help reduce volatility and encourage wider adoption.
No matter what the headline is, the real “good”news might just be the growing acceptance of cryptocurrency as a legitimized and mainstream alternative investment class. And that is a good thing for both cryptocurrency and blockchain technology generally.
***Disclaimer: This content is not financial advice and should not form the basis of any financial investment decisions nor be seen as a recommendation to buy or sell any good or product. Trading cryptocurrency is complex and comes with a high risk of losing money. You should carefully consider whether trading cryptocurrencies is right for you and take the time to learn how trading works and decide how much money you are prepared to risk.
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