Cambridge Center for Alternative Finance Representative states that Bitcoin is an economic revolution.
The professor said:
“Many economists dismissed it as a flawed form of money, something that could never achieve the level of adoption that it has. Today we estimate 5 to 10 million unique active users of cryptocurrencies, and in my opinion that’s nothing short of a minor economic miracle.”
What Bitcoin stands for
The pioneer digital currency, Bitcoin is the decentralized form of currency, it also has similar characteristics to gold in that it can be used as a store of value. The currency still has not topped the market cap of gold indicating that there is still a long way to go. The reason why Bitcoin is hailed as a revolution is because it allows for individuals to be able to transact without permissions from any central authority and they can do this in an anonymous manner. The currency can not be censored by anyone and also has the trait of being immutable in that it is unchanging over time in regards to potential actions that may be taken by central banks or other sort of authorities.
The value of it lies in its decentralized nature and it’s peer to peer protocol. These traits allow for the development of a separate economy for the bitcoin network without the need for various parties to help facilitate transactions.
A few central banks and governments have been cautious when they approach the topic of Bitcoin and have shunned it but others have embraced it providing for further and rapid growth (Japan, Finland, others).
The professor noted that it was a minor economic miracle but that might be an understatement.The market valuation of the currency has grown and people like Mike Novogratz say that it should grow to $2 trillion by 2018! With facts like these it is hard to simply state that this is a minor miracle.
The market capitalisation of bitcoin is growing and is outpacing established players like technology companies such as IBM which stands at $141.16 billion, and Walt Disney Co at $156.18 billion, bitcoin has already surpassed these companies and still continues to be rising.
The rise is expected because of the expected interest of institutional investors but bitcoin is still a drop in the bucket when compared with other assets in the overall financial space.
According to Thomas Glucksmann, a head of marketing at Gatecoin, a bitcoin exchange, bitcoin is merely a drop in the ocean when compared to the trillions of of transactions that happen presently on a daily basis in the currency and stock markets. Small purchases by retail investors in high volume may be driving these current crypto markets but what will happen the road is paved for institutional investors to jump in really move the needle?
The CEO of the US company coinbase stated that :
“Over 100 hedge funds have been created in the past year exclusively to trade digital currency. An even greater number of traditional institutional investors are starting to look at trading digital assets (including family offices, sovereign wealth funds, traditional hedge funds, and more). By some estimates there is $10 bln of institutional money waiting on the sidelines to invest in digital currency today.”
The institutional flow is expected to happen soon, but how soon?