All The Fintech - Issue #11
|Charley Ma||Nov 28, 2017|
I hope everyone was able to enjoy a long weekend and feeling sufficiently stuffed. While we were all busy eating, Bitcoin made a huge run over the weekend and is now knocking on the door of $10k per coin. Ethereum and Litecoin are also at all time highs.
My view on crypto seems to change every single week, but one thought that stuck out to me last week was summed up succinctly from this tweet from Naval of Angelist, particularly as it relates to Bitcoin.
"People who don’t get crypto won’t accept it as payment. People who do get crypto won’t part with theirs. The belief chasm is wide."
Anecdotally, I've found that "average" person that purchases bitcoin and other large cryptos falls under two camps: buy and hold for a very long time horizon (so called HODLing) or psuedo day-trade off price movements. Based off forums + reddit posts, $100,000 sounds like the magic number where people are saying they're hodling to.
That's a pretty massive chasm between people who are bullish on crypto (and thus don't want to let go of their holdings) vs people who are bearish or don't understand (and thus won't accept or buy). This makes it really tough to see a pure payment play for Bitcoin for the next 1-2 years. That being said, if the rate of growth continues the way it's going, $100,000 a coin might not be far off. Does the price of Bitcoin need to stabilize in order for it to have functionality as a value of exchange? In my opinion, I believe we need to see a consistent price for a significant period of time before people start selling and providing liquidity in the market. However when that happens, volatility is once again inherently introduced as a few whales can significantly move pricing. Long story short, I expect a marathon when it comes to seeing where Bitcoin goes. In the meantime, I'm still hodling :).