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The sensible shift from bitcoin maximalism to bitcoin realism

There was a time when all cryptocurrencies were traded against Bitcoin (BTC). Speculators ventured into other coins when they saw reassuring tokenomics or promising hype, but Bitcoin was their settlement coin of choice.

things have changed. Stablecoins form a major $150 billion pillar in the cryptocurrency market today. Perpetual futures amplify market sentiment too much and in most cases dominate price action. Much more capital, including from institutional funds, has entered the market recently, with only a moderate impact on the price of Bitcoin. So some former bulls are now dismissing Bitcoin as boring.

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Is this the end of Bitcoin maximalism? Probably not. But maybe it’s time for more realism.

Related: Gold, Bitcoin or DeFi: How can investors hedge against inflation?

Bitcoin in a sea of ​​memes

Just as Disney stock can hold its value alongside gold, new digital-native names like non-fungible token (NFT) project Bored Ape Yacht Club (BAYC) can rise alongside Bitcoin in the digital asset space. And just as investors would be willing to buy the rights to a nearly 100-year-old Mickey Mouse, BAYC represents a new approach to branding. And it might work.

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But it couldn’t be. It’s speculative what traders like.

ApeCoin (APE) volatility is not the same as Bitcoin today. The monkeys are chasing brand hype as Bitcoin now trades against a macro backdrop. It’s realistic to say that Bitcoin is consolidating as a core holding, not only in the digital asset space, but even among some brave institutional investors — who typically shun volatility. Bitcoin is the established base layer in the digital asset market, but will it also be the ultimate reserve asset?

To be honest, it’s not Ripple (XRP), Shiba Inu (SHIB) or Bitcoin Cash (BCH) that we’re seeing sovereign wealth funds starting to hold. No reputable pension funds pick them up either. Realists see that Bitcoin differs from its peers because it has proven resilient through multiple crises and because it is truly decentralized and outside the control of any single government.

We can see that in the payments space, Bitcoin’s dominance is evident with a market cap of $750 billion as it eclipses the next in line. At the same time, however, we cannot dismiss the rise of other “cryptocurrencies” over Bitcoin as meaningless just because it is not Bitcoin. Realism opens up conversation and greater understanding, which is ultimately the key factor in acceptance.

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Bitcoin for Boomers

From a price point of view, Bitcoin is only boring to those who crave the roller coaster ride of speculative trading. As that interest looks elsewhere, Bitcoin will mature and that in itself can unlock more growth.

As YouTube influencers race from farming and breeding to staking and mining, haven’t we also seen how the conversation about Bitcoin has matured so much and focused on first principles?

No, we haven’t seen $100,000 Bitcoin in 2021. But do we really have to be so greedy when we haven’t even reached 5% global adoption? Yes, in a less boring world, like all investments, bitcoin can benefit from human greed and speculation, but those same impulses can send any asset plummeting.

Related: boom or bust? Is there a possibility for bitcoin price to reach $100,000 in 2022?

Bitcoin takes time

A bitcoin maximalist typically wants to own enough bitcoin to be good for themselves across time and space. They also likely want a fair and just economy – hence their support for Bitcoin in the first place. A maximalist should also agree that seeing billions of people holding a little Bitcoin is better than a few million holding all of it.

In fact, buy-the-dip moments are not only useful for those most committed to bitcoin, but they also help with wider adoption as new entrants are drawn to the buying opportunity. It’s good.

In this regard, it helps to ask yourself how much Bitcoin you think you should own or aim for. And then act accordingly.

It took most staunch bitcoiners, including Michael Saylor, time – maybe years – to come to their inspirational views. Famed financier Ray Dalio is still evolving. Most politicians barely understand bitcoin and I have to assume there are even times when El Salvador’s President Nayib Bukele, who made bitcoin legal tender in his country, stares at the charts and feels nervous.

Related: El Salvador’s Bitcoin Law: Understanding Alternatives to Government Intervention

Anyone entering the crypto space for the first time because a funny dog ​​or pixelated primate has presented itself as a hyper-sound asset is also going to take time – lots of it. But the end result is not necessarily Bitcoin maximalism.

However, because it is a core holding company, most participants in this space already have some exposure to Bitcoin. Just looking at game theory in emerging markets and in the context of the current sanctions regime and inflation, most digital asset investors know that it is good to “hold some bitcoin”.

Too toxic?

Some say bitcoin maximalists are toxic. But humans are toxic everywhere. And what maximalists do well with Bitcoin is reiterating basic principles, which helps anchor the conversation. Their motto is: Bitcoin doesn’t need you, you need Bitcoin. True? Well, true or not, the point is, don’t dump your life savings into a memecoin because the community is so nice to you.

let’s be real The world is dealing with currency devaluations, bitcoin mining can and does serve environmental goals, the United States and its allies have frozen Russian foreign exchange reserves, the future is deeply digital, inflation is impermanent, and bitcoin is held in the context of one of these brands full sense.

Bear markets show what projects and protocols are really made of. Axie Infinity’s Smooth Love Potion (SLP) token is currently trading around 40 times lower than its all-time high. Bitcoin is about 2 times lower than its all-time high. Exceeding $69,000 sooner rather than later would not be unreasonable or unusual.

After all, “banks getting into bitcoin” is something of an oxymoron, and some might argue that bitcoin doesn’t need any of that, but it’s equally realistic to say that bitcoin’s integration into global finance and existing infrastructure will Makes the asset more resilient as it attracts more stakeholders to invest for the long term.

Nobody needs to be a bitcoin maximalist, but everyone should be a realist.

This article does not contain any investment advice or recommendation. Every investment and trading move involves risk and readers should do their own research when making a decision.

The views, thoughts, and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Ben Caselin is Head of Research and Strategy at AAX, the crypto exchange to be powered by London Stock Exchange Group’s LSEG technology. With a background in creative arts, social research and fintech, Ben develops insights into Bitcoin and decentralized finance and sets the strategic direction at AAX. He is also an active member of Global Digital Finance (GDF), a leading industry association dedicated to accelerating and adopting digital finance.