Bitcoin’s price crashed from $14,000 to $7,000 between July and November 2019.
This drop triggered panic and despair. A new wave of commentators claimed “bitcoin is dead / blockchain is useless” and some HODLers gave up.
Yet the price remains up 100 percent since the beginning of this year.
Many hope this most recent dip marked a short-term “correction” after a senselessly-parabolic run. A healthy move down, setting up an even more powerful rally that will send prices to the moon.
Nobody really knows, but if that rally it ever comes, it will mark the first time average people have easy and legal ways to get bitcoin.
They can buy it directly from a regulated exchange, use services like Bisq or LocalBitcoins, purchase bitcoin-backed financial products, get bitcoin rewards from Lolli or other providers, and stack sats with apps like Cash, MetalPay, or Crypterium.
On top of that, many countries have created or clarified laws around cryptocurrency—meaning it’s less risky to own and use crypto.
As a result, the next bitcoin boom will bring in a lot of people.
And a lot of money.
(If it ever comes.)
Image is cleaner
For most of its life, bitcoin remained a pet project of cypher-punks and computer geeks. Its biggest personalities were coders, anarcho-capitalists, and outright frauds. Guys like this:
Since then, crypto has gotten much more professional and commercial.
Wall Street is now involved. CNBC covers it. Government regulators talk about it casually and openly.
Its biggest advocates now look like this:
Conventional. Friendly. Normal.
Not scary.
On-ramps are better
In 2017, people had to wait weeks to open crypto accounts. Bitcoin wallets had terrible design and relatively few exchanges had legit licenses and professional operations.
Also, $22 trillion in U.S.-registered investment funds had no legal way to buy bitcoin on behalf of their clients. Murky rules and shady custodians kept them out of the markets.
Now, KYC takes 5 minutes and we have many legit, regulated exchanges, DEXs, trusts, mobile platforms, and services for people who want to move money into crypto.
Large investment funds have derivatives, trading desks, and financial instruments to “gain exposure” to bitcoin. Or, they can simply store bitcoin with a custodian for safekeeping.
Vested interests are prepped and ready
During the 2017 mania, few businesses had a way to capitalize on the run-up.
By the time boom came along, you didn’t have the many months of marketing, advertising, and “education” to get people thinking about crypto as a “normal” thing.
Now, thousands of stores have bitcoin ATMs. Bakkt and Starbucks plan to release a bitcoin-based payment app. You see crypto ads popping up everywhere. Altcoins and non-bitcoin blockchain projects have started gaining traction and users.
Fidelity launched digital assets platform and TD Ameritrade bought a stake in ErisX, a crypto exchange. Meanwhile, Bakkt (NYSE’s sister company), Circle Invest (Goldman Sachs subsidiary), and other deep-pocketed start-ups have set up shop in the cryptosphere.
Once bitcoin’s price goes up for a while, investors will get over their “disbelief” that a new bull run has started. FOMO will set in. Altcoins will pump.
At that point, do you think Wall Street will keep its crypto efforts secret?
Probably not.
So . . . wen moon?
Will all this activity make everybody forget about ICO scams and the 85 percent crash from the last bull run? Will the masses suddenly decide bitcoin has actual usage and potential? That it’s not some fake, useless internet money?
Yes.
“It’s different now” is a very powerful message.
Especially when it’s delivered by Wall Street to the millions of people who already own some sort of traditional financial asset.
Wall Street’s entry into crypto changes everything but nobody really ever talks about it. I just published a book with my thoughts about this topic. It’s called “Bitcoin or Bust: Wall Street’s Entry Into Cryptocurrency.”
If you have a chance to read it, I’d love to hear your thoughts.
Meanwhile, let’s see if we can get that bull run everybody’s hoping for. No bull run, no masses trying to buy bitcoin.
Relax and enjoy the ride!
Mark Helfman is publisher of Crypto is Easy and a top writer on Medium for bitcoin and investing topics. His book, Consensusland, explores the social, cultural, and business challenges of a fictional country that runs on cryptocurrency. In a past life, he worked for U.S. House Speaker Nancy Pelosi.