All cryptocurrencies were traded against Bitcoin (BTC) at one time. When they saw promising hype or assuring tokenomics, speculators tried other coins. But Bitcoin was the settlement coin of their choice.
Things have changed. The cryptocurrency market now has a crucial $150 billion pillar: stablecoins. Perpetual futures can amplify market sentiment and dominate price action more often than you might think. The market has seen a lot more capital lately, even from institutional funds. However, this has only had a modest impact on Bitcoin’s value. Some former bulls are now dismissing Bitcoin as boring.
Is this the end for Bitcoin maximalism? It’s unlikely. Perhaps it’s time to be more realistic.
Related: DeFi, Bitcoin and Gold: How can investors protect themselves against inflation?
Bitcoin and a sea of memes
As Disney’s stock can be valued next to gold, so can digital-native names such as the Bored Ape Yacht Club (BAYC), which is a nonfungible token (NFT), that can also rise alongside Bitcoin in the digital asset market. The BAYC is a new way to build brand equity, much like investors would be willing and able to purchase the rights to the nearly century-old Mickey Mouse. It could work.
However, it could. It’s speculative. This is what traders love.
ApeCoin’s volatility (APE), is different from that in Bitcoin. While apes are able to track brand hype, Bitcoin trades against a macroeconomic background. It is possible to see Bitcoin consolidating as a core holding. This is true not only in the digital asset space, but also with institutional investors who are often cautious about volatility. Bitcoin is the base layer of the digital asset market. But will it become the ultimate reserve asset as well?
In fairness, we don’t see sovereign wealth funds starting to hold Ripple (XRP), Shiba Inu(SHIB), or Bitcoin Cash (BCH). They are not being picked up by serious retirement funds. Realists believe that Bitcoin is unique because it has been resilient to multiple crises, and it is decentralized and is beyond the reach and control of any government.
It is clear that Bitcoin dominates the “payments sector” with a market capitalization of $750 billion. This makes it seem like it dwarfs all other players. However, it is not possible to dismiss the rise in other “cryptocurrencies”, which aren’t Bitcoin, as futile. Realisticism opens up more discussion and understanding which, ultimately, is the key driver for adoption.
Boomers can use Bitcoin
Bitcoin is boring from a price standpoint, but it’s great for those who love the thrill of speculative trading. Bitcoin is growing as people are more interested in it. This can lead to even greater growth.
We have seen YouTube influencers move from farming and breeding to staking, minting, and we don’t think so. But hasn’t the Bitcoin conversation become more mature and focused upon first principles?
We didn’t see a $100,000 Bitcoin in 2021. However, are we really that greedy when we’re not even at 5% global adoption? Bitcoin, like all investments, can be benefited from human greed and speculation in a more boring world. However, these impulses can cause any asset to drop in value.
Related: Boom or bust? Is it possible for Bitcoin to reach $100K by 2022?
Bitcoin is slow
A Bitcoin maximalist wants enough Bitcoin to be able to make it through all of time and space. They may also desire a more fair and just economy, which is why they support Bitcoin. Maximalists should agree that it is better to have billions of people owning a small amount of Bitcoin than millions of them holding it all.
Buy-the-dip moments can be very useful not only for the most committed Bitcoin users, but also to further distribute Bitcoin as more people are drawn to the buying opportunity. This is a good thing.
It’s a good idea to think about how much Bitcoin you should have or what you want to achieve. Then, act accordingly.
Michael Saylor was one of the most staunch Bitcoiners. It took him years to reach his inspiring views. Ray Dalio, the famous financier, is still developing. Most politicians don’t understand Bitcoin. I think there are times when El Salvador’s President Nayib Bukele, who made Bitcoin legal in his country, looks at the charts and feels anxious.
Related: El Salvador’s Bitcoin Law – Understanding the alternatives to government intervention
Anyone who is new to crypto will need some time. The end result is not necessarily Bitcoin maximalism.
Core holdings are a good way to get some exposure to Bitcoin. Considering the game theory in emerging markets, and the context of current sanctions, inflation, and other factors, most digital asset investors know that it is good to have “some Bitcoin.”
Some people believe that Bitcoin maximalists can be toxic. However, everyone is toxic. Maximalists in Bitcoin are good at reiterating the first principles. This helps to anchor the conversation. Their motto is “Bitcoin doesn’t need to you, it needs you.” True? True?
Let’s face it. The world is facing currency debasements. Bitcoin mining can and will serve environmental goals. The United States and its allies have frozen Russian foreign reserves. The future is digital. Inflation is not temporary and Bitcoin is perfectly appropriate to be held in any of these contexts.
Bear markets are a great way to see what protocols and projects really are made of. Axie Infinity’s Smooth Love Potion token (SLP), currently trades at around 40 times its all-time high. Bitcoin is currently trading at around 2-times its all-time high. It would be reasonable and not unusual to reach $69,000 sooner than expected.
Finally, “Banks getting into Bitcoin” might seem a bit of an exaggeration. While some may argue that Bitcoin doesn’t need any of this, it is equally possible to say that Bitcoin’s integration in global finance and existing infrastructure makes it more resilient and brings in more investors who will continue to invest long-term.
While no one should be a Bitcoin maximalist or a totalist, everyone should be a realist.
This article is not intended to provide investment advice. Every trade and investment involves risk. Readers should do their research before making any decision.
These views, thoughts, and opinions are solely the author’s and do not necessarily reflect the views or opinions of Cointelegraph.
Ben Caselin heads research and strategy for AAX, the crypto-exchange to be powered via LSEG Technology of the London Stock Exchange Group. Ben has a background in creative arts and social research. He provides strategic direction for AAX and develops insights into Bitcoin. Global Digital Finance (GDF) is his industry association, and he serves as a member of its working group.