|BTC uptime since 2014: 100%!
With the world awash in trillions of stimulus cash and with inflation rearing its ugly head, is it fair to say that the era of sound money, gold, silver and Bitcoin, is here?
It's fair to say it, sure. But judging from what we're seeing, clearly, saying it doesn't make it true. At least Bitcoin peaked at S$93,000; but gold and especially silver have been behaving rather tentatively this year. Come to that, silver has actually lost a decent amount of ground when, as poor man's gold, you'd think it would have gone higher, particularly given that it tends to ride gold's coattails. Then again, with gold barely eking out a gain itself and silver's industrial usage backfiring this time around, it's not really a surprise to see Ag losing ground.
In the end, pretty much everything has been backtracking, with Tech and Crypto bleeding the most. Mind you, Bitcoin's losses so far have been pretty modest, especially compared to Ethereum or (gasp!) the top 10 altcoins, such as Solana, Cardano. The good news is that post-carnage we'll probably have a lot fewer shit-coins
to tolerate. There's no way any of the proliferation of nonsense coins, meme or otherwise, are going to survive the crypto winter. No utility = no future. Courtesy Darwinism.
But what of Bitcoin? Well, whilst $93,000 is better than a poke in the eye with a sharp stick, quite a few votes went up for King Coin to attain escape velocity with a valuation of at least US$100,000 this halving cycle. That wasn't to be. When moon? Well, not now.
Plan B even went so far as to tweak his stock-to-flow model as it turned out to be overly optimistic. As it happened, it looks like Bitcoin, finite in number it may be, ended up competing for liquidity with the 20,000 or so cryptocurrencies conceived during this cycle.
That said, given that the vast majority of these dead-coins-walking will soon be roadkill on the crypto highway, most speculators that tried their luck on these longshots are likely to ultimately gravitate back to quality coins, i.e. established incumbents like Bitcoin and Ethereum and some of the smart contract coins. As a matter of fact, that's exactly what we've been witnessing recently: Bitcoin's dominance has been creeping back toward 50%, a level last seen in April of 2021.
But it's not just the fact that there are fewer and fewer altcoins to contend with. Quite the contrary. The other reason Bitcoin comprises a larger section of the crypto-pie, even though we're in a bear market, is that global adoption of Bitcoin is gaining ever-more traction. Crypto winter notwithstanding, Bitcoin is being integrated in more countries, more companies and more aspects of our lives. A quick glance at this Bitcoin Adoption
page will erase all doubt that Bitcoin's utility in the world is expanding rapidly.
Institutional in-flows are continuing as we speak, in spite of the crypto doldrums. The Lightning Network is growing in just about every parameter you look at. Furthermore, at least two nations have decreed Bitcoin legal tender, with a handful other countries poised to follow.
But perhaps most surprisingly of all, in spite of the oft-quoted but factually incorrect chestnut that Bitcoin is slow and expensive to transact, thanks to the Lightning Network and the growing cadre of payment gateway providers, more and more companies, big and small, have started accepting Bitcoin as payment for goods and services. Of course the other main reason is the fact that paying by Bitcoin offers a number of other awesome benefits.
Arguably the most appealing advantage of using Bitcoin as a medium of exchange is the fact that it's much cheaper than receiving money the traditional way. Typically, the cost of a Bitcoin transaction is just 1% of the sum to be paid. In fact, some payment providers are charging as little has 0.5%! Compare this with 3% or more for credit card and PayPal transactions and it's easy to see why momentum has started to shift away from so-called TradFi, traditional Finance.
No less attractive is Bitcoin's speed. Whereas stodgy bank transfers may actually take a number of days or more for the funds to finally be received, Bitcoin payments usually, certainly those sent by means of the Lightning Network, arrive within seconds. And obviously a Bitcoin transaction is 24/7, regardless of Saturdays or Sundays or public holidays. In that regard, it's akin to sending an email. Thanks to the Lightning Network, Bitcoin payments go Around the World in 8 Seconds. Or less.
Best of all, no more chargebacks or other issues that occur when a merchant's credit card company unilaterally insists on reversing a payment made. With Bitcoin, chargebacks and credit card fraud are a thing of the past, since Bitcoin transactions are final and irreversible. naturally, legitimate refunds are always possible.
Incidentally, Bitcoin transactions aren't only beneficial to merchants. Consumers benefit too, because for one, when transacting globally with Bitcoin, there's no need for changing one currency into the other, which typically involves commission, to the detriment of the buyer. Bitcoin is Bitcoin around the world; what you see if what you get. And of course nobody's stopping merchants from sharing Bitcoin's transaction savings with their customers. Bitcoin enables merchants to choose between either lower cost and higher profit, or a lower price point and a growing customer base whilst retaining revenue. Not comfortable holding Bitcoin? Just have it converted to fiat instantly. Want to HODL? That's possible too.
As if all of that isn't enough, let's also not forget that with Bitcoin's capped supply, it's destined to become a store of value too. As a matter of fact, in some ways it's a more useful and versatile store of value than even gold. Imagine storing any sum of money anywhere you want, with zero footprint and zero cost, and
being able to send any amount of that money to anyone in the world for next to nothing. All you need is a Bitcoin wallet to be able to do just that. Try sending gold around the world. It's not exactly affordable, nor, let's face it, advisable.
Now, to be sure, Bitcoin is still too volatile for most to be a completely worry-free store of value. Then again, what investment is
completely worry-free? Particularly given the uncharted territory that we're finding ourselves in nowadays. But in addition, most observers agree that the main reason for Bitcoin's fluctuations is its relative nascence. In fact, Bitcoin's infamous volatility has actually come down a few orders of magnitude when compared to previous years. Which is exactly what you'd expect from an asset that's becoming more and more entrenched.
Still, be that as it may, it's safe to say that any fairly new development still in the early run-up stage, especially such a globally significant one, with as much potential as Bitcoin, is not going to be boring whilst it's busy establishing itself.
So yes, right on cue, after coming close to reaching escape velocity, Bitcoin descended into so-called crypto winter, along with the rest of the crypto industry. Equity and bonds the world over aren't spared either. In fact, most assets have been deflating bigtime. The exception being commodities and real estate, in some jurisdictions at least.
Rising interest rates and less available liquidity have both started taking a serious toll on valuations across the board. Bitcoin additionally has to contend with the waning of the halvening effect, which tends to kick in halfway though its 4-year cycle.
It's déjà vu all over again.
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I wrote the above article myself and it expresses my own personal opinions and views on Bitcoin. I am unable to guarantee that the information and/or results will be correct. Furthermore, whilst I own some cryptocurrencies, I do not receive compensation for my writing and I have no business relationship with any of the companies mentioned in above article. In addition, I am not an investment advisor and above article is for purely informational purposes. Investors are advised to personally undertake adequate due diligence, or to consult a financial advisor in order to determine what assets - if any - are appropriate to invest in.
Bryan, a Singapore PR, has spent two separate stints in Singapore, spanning close to two decades. As is the case for most non-techies, although Bryan's first exposure to Bitcoin was around 2010, it wasn't love at first sight. However, Bitcoin's impressive resilience, meteoric rise and world-changing potential have converted Bryan, to the extent that he has now pivoted to fully commit to Bitcoin.
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