You’ve seen the prognosticators of doom and gloom. US Inflation is at an all-time high, which should strengthen Bitcoin as a hedge against inflation, but it hasn’t. International conflict should bolster the premier cryptocurrency that isn’t constrained by international borders. It hasn’t. As of this writing, Bitcoin is worth approximately half of what it was six months ago and remains incredibly volatile.
Predictably, those who didn’t believe in cryptocurrency are coming close to outright gloating. Bitcoin has been compared to a Ponzi scheme, denounced repeatedly by Warren Buffett, predicted to go to zero, and dismissed as a “fraud” by JP Morgan Chase CEO Jamie Dimon.
So why would someone think, in the middle of all of this, that Bitcoin is getting stronger? What could possibly embolden someone enough to think that Warren Buffett, Jamie Dimon, and financial analysts are missing something? It’s because over the past months, progress has continued in one specific area that, if it continues, is highly likely to cause a re-evaluation of those opinions.
Bitcoin is slowly becoming more and more transactional. The longer Bitcoin exists, and the more it’s viewed as an acceptable currency for goods, the more stable it will become. The latest corporation to join a litany of “those who accept Bitcoin as payment” is Gucci; the fashion giant announced last week that it will accept Bitcoin as payment.
While this by itself isn’t a major development, it simply adds to a list of companies that will accept Bitcoin, either directly or through a third-party platform, for goods and services. And that list means something.
“This might sound cliché, but Bitcoin is becoming too big to fail,” says MacguyverTech CEO Steve (Mac) McKeon. “You have companies, organizations, and even countries accepting Bitcoin as an acceptable form of payment now. The easier it becomes to use, the more people are going to value it. And the more people value it, the more it makes sense to own it as a commodity.”
Indeed, the main reason Warren Buffett denounced Bitcoin is, as he stated, “I’d have to sell it back to you one way or another. It isn’t going to do anything.” One of the biggest drawbacks early on was that it was difficult to move Bitcoin to a form of currency that was widely accepted, like the U.S. Dollar.
Even today, the process of moving digital currency from one form to another can be an arduous and highly confusing task. When this author first tried to exchange Ethereum for another crypto currency, he had to use multiple digital wallets, consult with a currency exchange platform, pay gas fees, sacrifice a live chicken, and perform a Celtic dance under a full moon before he accomplished the feat. Okay, I’m making those last two parts up, but the point is that dealing with cryptocurrency can be quite confusing and difficult. The ability to use Bitcoin with a business directly or through a third-party platform greatly enhances its utility.
Today, one can buy a BMW to drive around and shop at Starbucks, Home Depot, Gucci, and Whole Foods, buy a home or rent an apartment through numerous real-estate companies, plan and pay for a vacation through Expedia, or just stay at home and shop on Amazon, Overstock or Etsy. In a very short period, we’ve gone from Bitcoin having very little practical utility as a currency to being able to acquire food, clothing and shelter with it at the click of a button. Don’t think that even the biggest skeptics are unaware of this transition.
For example, the aforementioned Jamie Dimon authorized Bitcoin to be used in client investments last year, and has softened his cryptocurrency stance considerably. And while not saying anything positive, Buffett’s Berkshire Hathaway invested one billion dollars in the Brazilian neobank Nubank earlier this year. Nubank just happens to be the largest cryptocurrency bank in Latin America.
While the immediate outlook for Bitcoin is still murky, the adaptation by retailers, investors and financial institutions is a sign that people might say they don’t believe in Bitcoin, but their actions…well, as they say, actions speak louder than words. The actions of plenty of financially-sound organizations are positively screaming as they prepare for the future of finance.
Once again, please remember that we at MacguyverTech are not financial advisors; these are strictly our opinions. Please do your own research, seek advisement before investing, and never invest something that you cannot afford to lose.
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