Herve Larren’s 13 Reasons That Will Propel Bitcoin Out of the Bear Market
By Herve Larren, YPO Member
This is a unique point in the history of money. We have achieved a method where a few people can no longer have an overpowering control over currency. The cryptocurrency bear market we’re in is not the first and certainly will not be the last. Yet, many are asking why is bitcoin trading at such a low price and going lower?
While the long-term trend is up, there will be many short-term swings in the market along the way. Fundamentally, the world needs Bitcoin. Originally created as a counter movement to the global financial crisis of 2008, Bitcoin represents a way to opt out of the system and get exposure to an uncorrelated asset class when level of debts grow every day and the prospect of a financial crisis worries economies. For this reason, the demand will only increase in the coming years as Bitcoin finds more and more uses and applications.
Some incredibly positive developments are taking place in the industry right now that the general public isn’t aware of.
1. A new crypto-asset exchange.
The owners of the New York Stock Exchange (ICE), are launching a new crypto-asset exchange in Q1 of 2019 called Bakkt, which is designed to serve as a scalable on-ramp for institutional money (banks, hedge funds, brokers, etc.), merchant providers, and consumers by promoting greater efficiency, security, storage and transfer of digital assets.
Large banks, institutions and fund managers won’t commit major investment dollars into this industry through exchanges like CoinBase, Binance or Bittrex. They are dealing with trillions of dollars, which requires the levels of security, settlement and insurance that Bakkt will bring to the table. Starbucks has partnered with them to enable payment in Bitcoin from within the Starbucks mobile app.
2. Fidelity opens crypto e3
Fidelity is the 5th largest asset manager in the world, with 27 million customers and USD7.2 trillion in assets under management.
Fidelity has launched a second company called “Fidelity Digital Assets” to provide enterprise-grade custody solutions, trading platform and advisory services to their 13,000 institutional clients. Fidelity is opening up their USD7.2 trillion in assets to crypto and will soon give their 27 million customers the ability to buy Bitcoin through their 401K.
3. Adoption of Square’s “Cash App” surges on iTunes.
Cash App, the mobile payment application launched by Square, has become the 12th most downloaded app in iTunes, surpassing Spotify, WhatsApp, Venmo, Uber, Twitter, Lyft and Google Maps.
Why is that relevant?
Well just like PayPal and Venmo, Cash App makes it easy to send and receive money, but it has one primary distinction.
Cash App also makes it incredibly easy for their 40+ million users to buy and sell Bitcoin directly in the app. In fact, it’s the easiest way to buy and sell Bitcoin in the world right now.
PayPal and Venmo will follow.
4. Ohio starts accepting Bitcoin for tax payments.
In December 2018, the state of Ohio became the first state in the U.S. to enable taxpayers to pay their taxes with Bitcoin.
They see the potential of this brand-new industry and they want to establish Ohio as the new preferred home for blockchain startups.
5. Germany’s second largest stock exchange plans to launch crypto trading in 2019.
Following ICE, Germany’s second-largest stock exchange, Boerse Stuttgart Group, is set to launch a cryptocurrency trading platform in the first half of 2019 with SolarisBank. Germany has the 4th largest economy in the world, and just like the developments from ICE and Fidelity, this will serve as an on-ramp into crypto for trillions of German Euros.
6. Binance Crypto Exchange Surpasses Nasdaq and Deutsche Bank growth and profits in less than 24 months.
Binance, the world’s most popular crypto exchange has grown from two million users in January 2018, to over 10 million today. It also expects to see USD1 billion in profits from 2018, despite the bear market.
To put this number into context, the Binance crypto exchange produced USD200 million in 2018 Q1 profits, while Nasdaq produced USD209 million, and Dueutsche Bank brought in USD146 million.
Binance is less than two years old and has 200 employees.
Nasdaq is 47 years old, with 4,500+ employees.
Deutsche Bank is over 150 years old and has over 100,000 employees.
In less than two years, and during a bear market, Binance has surpassed these global institutions in every meaningful category.
7. Creation of ID-verified crypto wallets doubles in 2018.
According to a study conducted by the Cambridge Center for Alternative Finance, the number of ID-verified cryptocurrency users nearly doubled in 2018, from 18 million to 35 million, despite the bear market.
8. Bank of America become largest crypto-patent holder.
Bank of America has become one of the most active banks in the world when it comes to filing blockchain and cryptocurrency related patents.
To date, they have filed 50 blockchain related patents since 2014, and were recently awarded a patent for a device that stores cryptographic keys and the document’s details hint at applications for cryptocurrencies in October.
9. Salesforce wins patent for a blockchain-based platform.
Yep, Salesforce has entered the crypto industry as well with a patented system designed to eliminate spam. According to the patent filing, “the system can better identify legitimate (wanted) messages and distinguish them from illegitimate (unsolicited) messages. Used properly, the immutability and distributed nature of the blockchain can make it impossible to modify information once it has been committed to the blockchain.”
Other uses for the concept could also help guarantee the authenticity of medical records, educational transcripts, deeds, property rights, legal documents and more.
Salesforce has a USD107 billion market cap.
10. General Motors files blockchain patent for self-driving cars.
General Motors filed a patent application in January that details a process by which self-driving cars would be able to store all their data on a distributed ledger. The document, produced by GM Global Technology Operations, further notes that any data stored could be easily shared among the blockchain’s users.
They see this technology as a critical piece required to bring true autonomously driving cars to the road in mass.
11. Intel wins patent for energy-efficient Bitcoin mining chips.
One of the biggest complaints about Bitcoin during last year’s bull run, was the amount of electricity required to process and verify transactions.
Improvements like the Lightning Network will address this challenge, and Intel wants to get in the game as well.
Last month, the U.S. Patent and Trademark Office awarded the company a patent outlining a processor, which claims to be able to conduct “energy-efficient high performance bitcoin mining,” specifically naming the SHA-256 algorithm used by Bitcoin.
Intel is getting into crypto.
12. Amazon launches “Amazon Managed Blockchain” service.
Many of the largest companies in the world including Adobe and Netflix, use Amazon Web Services (AWS) to host their websites. (That’s what we use at SMM).
Well as of January 2019, Amazon has entered the blockchain space when they announced the “Amazon Managed Blockchain” platform, which is a fully-managed service that makes it easy to create and run scalable blockchain networks.
Amazon is getting into crypto.
13. 25,000+ new CoinBase accounts created per day in 2018.
Finally, CoinBase reported that in October 2018 they started seeing record new-user growth again, (25,000+ new accounts opened per day) which has now surpassed 25 million total … in the middle of a bear market.
Crypto exchanges like Binance and Coinbase are already surpassing their legacy counterparts in growth and profits.
The biggest players on Wall Street are setting the table for their entry into the market.
Mass use and adoption will continue to grow as companies like Square’s Cash App, and Starbucks simplify the process.
And it’s clear that companies like Amazon, Bank of America, SalesForce, GM, Microsoft, Intel, are all scrambling to get involved in the industry.
But here’s what’s really important to understand…
The maximum number of Bitcoins that can ever be produced is just 21 million.
As of today, there have been 17.4 million Bitcoins mined since it was launched in 2008, and it’s estimated that 25 percent of them have been lost forever on discarded computers, lost hard-drives, lost private keys, etcetera.
That means there already isn’t enough Bitcoin for each of the users on Coinbase alone to own a single Bitcoin.