A meaningful transition from bitcoin maximalism to bitcoin realism


There was a time when all cryptocurrencies were traded with Bitcoin (BTC). Speculators guaranteed token economics or invested in other coins when they saw the hype, but Bitcoin was the payment coin of choice.

Many things have changed. Stablecoins now constitute a significant $150 billion pillar in the cryptocurrency market. Perpetual futures overly amplify market sentiment and often dominate price action. Much more capital, including institutional funds, has recently appeared on the market with only slight impact on the Bitcoin price. So some former bulls now dismiss Bitcoin as boring.

Is this the end of Bitcoin maximalism? Probably not. But perhaps it’s time for more realism.

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Bitcoin in a sea of ​​memes

Just as Disney’s stock could be worth only second to gold, new digital unique names such as the Nonfungible Token (NFT) project Bored Ape Yacht Club (BAYC) could emerge next to Bitcoin in the digital asset space. And just as investors are willing to get the rights to the nearly 100-year-old Mickey Mouse, BAYC represents a new approach to brand building. And it may work.

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But it may not be. This is speculative that traders love.

The volatility of ApeCoin (APE) is not the same as the volatility seen in Bitcoin today. Apes track brand hype, while Bitcoin now trades in a macroeconomic setting. It is realistic to say that Bitcoin is consolidating not only into the digital asset space, but also as a core holding asset, with some brave institutional investors avoiding volatility in general. Bitcoin is an established base layer in the digital asset market, but is it also the ultimate reserve asset?

To be fair, it’s not Ripple (XRP), Shiba Inu (SHIB) or Bitcoin Cash (BCH) that sovereign wealth funds are starting to hold. Even serious retirement funds don’t choose them. Realists believe that Bitcoin differs from its competitors because it has proven to be resilient across crises, is truly decentralized, and is beyond the control of a single government.

It can be seen that Bitcoin’s dominance in the “payments” sector with a market cap of $750 billion is obvious as it dwarfs the next ranking. At the same time, however, the rise of other “cryptocurrencies” to Bitcoin cannot be dismissed as futile simply because it is not Bitcoin. Realism opens up dialogue and greater understanding, which are ultimately key drivers of adoption.

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Bitcoin for Boomers

In terms of price, Bitcoin is boring only for those who crave a roller coaster rush of speculative trading. As the interest sees elsewhere, Bitcoin is growing and can achieve more growth on its own.

Haven’t we seen the conversation about Bitcoin become much more mature and focus on first principles while YouTube influencers compete from farming and breeding to staking and foundry?

No, we didn’t see $100,000 in Bitcoin in 2021. But should we be so greedy if we haven’t yet reached 5% adoption globally? Yes, in a less tedious world, Bitcoin can benefit from human greed and speculation as any investment can, but the same impulse can cause an asset’s value to plummet.

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Bitcoin takes time

Bitcoin maximalists generally want to transcend time and space to own enough Bitcoin for themselves. They will also want a fairer and more equitable economy. So, initially, support for Bitcoin. Maximalists have to agree that it is better to see millions of people holding a few bitcoins than holding all of them.

In fact, buying moments are not only useful for those most committed to Bitcoin, but they also help with further distribution when new entrants are attracted to buying opportunities. That’s a good thing.

In this regard, it is helpful to ask yourself how much bitcoin you think you should own or target. Then act accordingly.

Most staunch Bitcoiners, including Michael Saylor, took some time (probably years) to arrive at an inspiring view. Famous financier Ray Dalio is still evolving. Most politicians have little understanding of Bitcoin, and I think there are times when President Nayves Bukele, who made Bitcoin a fiat in the country of El Salvador, looks at the chart and gets nervous.

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Even a newcomer to the crypto space takes a lot of time, as funny dogs or pixelated primates have presented themselves as hyperacoustic assets. However, the end result is not necessarily Bitcoin maximalism.

However, since it is a key holding, most participants in this space already have some exposure to Bitcoin. In the context of current sanctions regimes, as well as game theory and inflation going on across emerging markets, most investors in digital assets know it’s good to hold “some bitcoin”.

Is it too toxic?

Some say that Bitcoin maximalists are poisonous. But people are poisonous everywhere. And what Bitcoin’s maximalists are good at is repeating the first principle that helps keep the conversation in place. Their motto is that you don’t need bitcoin, you need bitcoin. truth? Well, true or not, the point is, don’t put your life savings in memecoin because the community is very friendly to you.

Let’s be real, the world is dealing with currency depreciation, and Bitcoin mining can and is really contributing to its environmental goals. The United States and its allies have frozen Russian foreign exchange reserves, the future is completely digital, inflation is not temporary, and they have bitcoin in these circumstances. perfect sense.

A bare market shows what projects and protocols actually consist of. Axie Infinity’s SLP (Smooth Love Potion) token is trading around 40x below its current high. Bitcoin is about 2x below its all-time high. Breaking $69,000 sooner or later would be unreasonable or uncommon.

Finally, while it is somewhat paradoxical for a bank to “get into Bitcoin” and some might argue that Bitcoin doesn’t need it, it is likely that Bitcoin will attract more stakeholders once it is integrated with global finance and existing infrastructure. Because of that, it is equally realistic to say that assets are more resilient. Someone to invest in the long term.

No one has to be a Bitcoin maximalist, but everyone has to be a realist.

This article does not contain investment advice or recommendations. All investments and trading involve risks and readers should do their own research when making decisions.

The views, thoughts and opinions expressed herein are solely those of the authors and do not necessarily reflect or represent those of Cointelegraph.

Ben Caselin Head of Research and Strategy at London Stock Exchange Group, AAX (AAX), a cryptocurrency exchange powered by LSEG technology. With a background in the creative arts, social studies, and fintech, Ben develops insights into Bitcoin and decentralized finance and provides strategic direction at AAX. He is also a working member of Global Digital Finance (GDF), a leading industry body dedicated to driving the acceleration and adoption of digital finance.

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