Despite the recent retracement in bitcoin and crypto prices this past two weeks, in my opinion we are now only half way through this current bull market cycle. This is a sentiment shared by other more qualified experts in the industry too, and is based on past history from previous cycles in 2013 and 2017. So this correction – even if it becomes a 40% dip – is normal and has occurred in the past. The next leg up is still to come.
At this point in the journey crypto is really going more mainstream by the day. Bitcoin has its own ETF since February and this month Ethereum has just received three ETFs in Canada. This is great news as it shows how mainstream institutional investors from the legacy fiat markets are happy to adopt cryptocurrency as part of their portfolio. Anyone who doesn’t yet have some crypto in their portfolio would appear to be getting left behind.
These ETFs or exchange traded funds, are the tool by which big investors, who use brokers to buy for them, tend to enter the market. It’s an indirect approach for those who prefer to rely on a broker, and it’s frowned upon by crypto enthusiasts who are their own sovereign bankers and brokers. But the average person with more money than knowledge of finance may want to have someone else tell them what to do or manage their money for them.
With Ethereum now part of the mainstream investment landscape in Canada, it will push USA to catch up and stop lagging behind. China is well ahead in the crypto and CBDC game so they will probably take over the world financial market and knock the dollar off its pedestal as the global reserve currency soon. Already the dollar has shrunk to only about 55% of global reserve currency or use in international trade. Once the dollar falls below 50% of all international traded currency for goods and services, it can no longer be called the world reserve currency, so that time is getting closer by the day.
Now with Ethereum becoming such a hot commodity in Canada’s mainstream financial markets, it looks like some people prefer investing in Ether than in bitcoin. And this makes sense as they are two distinctly different products or assets. Bitcoin has become like the equivalent of digital gold. It is seen more as a store of value, while Ether has more use cases as a platform for smart contracts and building Dapps, and multitudes of altcoins.
So their utility is quite different. It actually helps investors when bitcoin is slow in its tps (transaction per second) and also has a code that is stable and never changed. Ethereum on the other hand needs to be fast and scalable and allow for constant improvement in the code to facilitate use among developers and investors. We certainly need to fix the gas fee problem, where miners are hijacking users and holding them ransom with extortionist gas fees for every transaction. I personally refuse to trade or use Eth until this gas fee is reduced to negligible once more.
So the overall market correction now is normal and is shaking out the weak hands or new retail investors who sell under these conditions, while the long term “hodlers” prefer to buy these particular dips. And with the ETFs emerging and China becoming bullish on Bitcoin again, it looks like the long term trajectory is still positive and healthy. Cryptocurrency is here to stay and may well be the dividing line that determines which nations rise or fall in coming years.
Those who adopt bitcoin and crypto more easily will prosper and thrive while those nations that ban it or avoid it will fall by the wayside, financially speaking. Bitcoin as the new gold and store of value is inevitable. It is scarcer than gold in fact. This digital gold is the people’s money. Fiat is government money, even if in the form of CBDCs. Once central banks like China and others begin using their digital currency as a popular tool to replace paper notes, cryptocurrency will be mainstream and physical cash will fall away into the annals of history.
With Gary Gensler recently made head of the SEC (Securities and Exchanges commission) in USA, we have someone who is more familiar with cryptocurrency so it won’t be long, in my pinion, before America also adds the much appreciated crypto ETF to their financial market as a tool for investors. Canada has beaten them to it so they need to up their game to stay competitive. It’s amazing how few people actually know the details about cryptocurrency, like the difference between bitcoin and ethereum, and that’s why the mainstream need these ETFs in order to feel safe entering the crypto market through a broker or investment manager.
We are still at the early days of cryptocurrency history and this bull market will continue all year while the long term trajectory of cryptocurrencies will continue for decades to come. It all depends on your perspective. We crypto enthusiasts are way ahead of the curve still and the majority of the world population are still to get on board, so consider yourself an early adopter and ahead of the pack, with great first mover advantage.