Bitcoin On The Brink of Mass Adoption. Whither Next?

Over the last few months, we have seen major growth of interest in Bitcoin. Tesla, Mastercard, Visa, PayPal, Apple Pay, Uber, Amazon, General Motors, Twitter, and Oracle – all of them began talking about crypto integration as a payment method.

The argument is simple - the current financial system is outdated and the future is where transactions will be completed in seconds, not days.

JPMorgan even said that cryptocurrencies have already shown their full potential, and the participation of classic companies from the world of finance in the cryptocurrency market has already become an established trend that will continue to grow.

Mastercard as well as Tesla went even further disclosing their plan to offer support for some cryptocurrencies, joining a string of big-ticket firms that have pledged similar support. Asset manager BlackRock Inc and payments Companies Square and PayPal have also recently backed cryptocurrencies.

What does mass adoption mean?

Without any doubt, it is a huge step for the crypto industry in terms of mass adoption. At the same time, it is a humongous step towards centralization and loss of anonymity.

One of the main benefits of cryptocurrencies was the possibility to avoid the watchful eye of state actors, powerful corporations, hackers, and others who might be well-positioned to build a dossier of one's activities.

It is also true that due to the lack of regulation, crypto users are not able to earn interest, basic consumer protection, and the absence of legal infrastructure for adjudicating disputes. On the other hand, that is the cost of privacy protection.

Clearly, governments don’t want to lose control over money flow. Big brother simply can’t allow it. As a result, regulators pressure cryptocurrency exchanges to drop privacy-enhancing tokens such as Monero.

Back in 2018, the G20 leaders resolved to “regulate crypto-assets for anti-money laundering and countering the financing of terrorism in line with FATF standards.” Thus, we have reached an impasse, with institutions demanding control and countenancing surveillance at one extreme, and cyberlibertarians demanding privacy at the expense of regulation at the other.

The future of anonymity

Unfortunately, it looks like libertarians will lose again. Overall, the issue is not so much in governments’ desire for control but the foolishness of the crypto community itself.

For years, they were praying for institutional money and as it comes the FED turns its hard eye on the industry. One doesn’t need to be an oracle to say what is going to happen next – regulation and the following taxation. The only solution would be not to cash out bitcoins or any other cryptocurrency and use different types of anonymizers, but most probably, those will be prosecuted. 

What comes after mass adoption?

Either way, I believe this part of the story is quite clear, so let’s move to the next question and the reason you decided to read this article – what comes next after mass adoption? The approval of crypto ETFs. Not so long ago, Canada's financial regulator approved the first publicly traded bitcoin ETF in North America. The Purpose Bitcoin ETF will trade on the Toronto stock exchange. 

In this context, many expect the US SEC to follow in Canada's footsteps. Indeed, Donnelley Financial Solutions applied for registration of NYDIG Bitcoin ETF under the Securities Act of 1933. The initial Authorized Participant is Morgan Stanley & Co. LLC. It will be interesting to see what happens as for now, all the attempts failed. 

Where will Bitcoin go?

Talking about the price of Bitcoin, 96% are long as good news continues to push the quote up to the skies. As always, projects are around $100,000 per coin. In reality, it’s hard to say what will happen next as the market cap of the crypto industry is relatively low, and the right attitude with the right volumes could do anything, from the new pump to the burst of the bubble. 

If that is what crypto now stands for – money – we could officially say that Satoshi Nakamoto's creation has become part of the financial system it was supposed to fight.