A Week in Crypto
There are two words I’d use to describe the last week in crypto, and they’re CRITICAL MASS.
If you have an understanding of how new products and markets are developed, then you’ll know there’s a point in growth called ‘critical mass.’ Critical mass is when the sheer volume of users, promoters, and positive news tips a market into momentum growth. Takes it from ‘why do you have/use that?’ to ‘why DON’T you have/use that!’
Has crypto reached critical mass?
Hindsight really is 20/20, and this will always be easier to determine in retrospect and that it is when you’re living it, right here and now.
But that said, my guess is not yet – but get ready, because it’s getting incredibly close.
Current crypto news coverage isn’t particularly widespread or exclusively positive, but it’s not negative either. Conversations with friends, family, and strangers aren’t negative either. They’re sounding less like, ‘Crypto? Sounds way too risky for me,’ and more like, ‘I don’t know much about crypto, but I feel like I should now’.
And that’s precisely the point. People are waking up and realising that the time is now.
This week in price action.
Price action in crypto this week was classic ‘consolidation’. After weeks of positive growth, the market hit record highs. So naturally, prices will now waver and shift sideways.
This is a pivot point. Prices could keep current levels, drop dramatically, or suddenly burst through these highs. No one really knows. All anyone knows for sure is that the market is positive, and the number of users and promoters continues to grow at an accelerative rate – hence all this talk of impending critical mass.
This week in market developments.
We initially thought that major companies would move faster to jump on board the crypto train, but it looks like they needed time to get organised. That said, the big boys are coming to the crypto market, and the walls are shaking.
Every day there’s more news of the market’s growth. The old school of thought – ‘Bitcoin is a scam!’ ‘Crypto’s a bubble!’ ‘Crypto’s a joke!’ – has been forgotten. Crypto’s getting bigger and bigger, and everyone’s talking about it.
1. Crypto hits the US’s biggest indexes.
The S&P Dow Jones Indexes [S&P DJI] are America’s biggest asset market indexes. They’re used as a benchmark for all market commentary and investments, and they just announced that they’ll launch cryptocurrency indexes in 2021.
"With digital assets such as cryptocurrencies becoming a rapidly emerging asset class, the time is right for independent, reliable and user-friendly benchmarks.”
- Peter Roffman, global head of innovation and strategy at S&P DJI
There are two key points I want to highlight from this quote.
First, Roffman called cryptocurrency an ‘emerging asset class’. In the past, Big Wall Street commentators have laughed at this concept. They certainly won’t be laughing now. Remember, Dacxi’s message is that crypto isn’t a ‘get rich quick’ scam. It’s an investible asset class. Treat it like one, and it can be the key to building your personal wealth.
The second point to note; if the S&P DJI is launching in 2021, it means that the financial experts expect crypto to grow far beyond current prices.
2. Spotify and Uber will be announcing more details of their crypto plans.
Both companies are part of Libra, Facebook’s consortium. Libra is meant to be launching in January, and I’ve no doubt it will change the crypto world forever.
Stablecoins are when an organisation like Libra in Switzerland puts a large amount of a currency into an account, and issues a token to represent it. One token = one dollar.
This token is then used to transfer money without the normal costs and hassles of the banking system. The internet gave people the ability to send a digital letter [email] anywhere in the world in just a second. Now, stablecoins will give people the ability to do the same with currency.
Imagine all the sportify eCommerce websites using Libra instead of a traditional, expensive payment system. No visa or Paypal costs. The whole world could sell globally instantly, and nearly for free.
Everyone wins. Well, except for the old-school banking payment system, that is.
3. Governments are getting some skin in the game with their own coins (CBDCs)
Government crypto are not ‘investible’ by everyday people, but they’re yet another sign that crypto is becoming well and truly mainstream. China is the market leader in CBDCs. And this week we heard further comments from the CEO of the European Central Bank and Bank of Canada, confirming their push to launch their own crypto money.
So, why are governments moving so quickly? It’s not because of China. It’s not even because of Bitcoin. Their biggest worry, and the reason they’re scrambling to get amongst, are stablecoins. Specially, Facebook’s Libra launch planned for January.
Why do stablecoins have the world’s biggest governments shaking in their boots? Because they’ll allow major consumer companies like Facebook, Uber, Spotify, and more, to operate outside of the traditional banking system. This was an idea first pioneered by Bitcoin, and tody it’s starting to take flight. The result? The disruption of traditional payments and banking, and the death of the banking monopoly. 2021 is going to be a blast.
A few final thoughts…
At Dacxi, we’re thrilled by the market’s latest developments. The lack of mainstream media coverage of crypto means today’s the perfect time to buy. Just remember, while the trends are going up and getting stronger every week, the market will still fluctuate. So hold on tight, and enjoy the ride.