Bitcoin Adoption Expansion set to Continue Despite the Recent TurbulenceJune 26, 2021
When the markets are crashing, no matter what domain that might take place in, the public becomes worried. Some become so worried that they are ready to completely write off the same market and its assets. These are the individuals and companies who sell stock and bonds on the first sign of trouble and never look back. However, when the markets are crashing with even more force and volatility, almost everyone becomes a version of this person to some extent. The same happened recently on several occasions with the crypto market crashes. Since reaching record highs in April, the market took a double tumble which took the price down of assets like the BTC token by double digits. The driver of the negative sentiment was the crackdown on crypto in China.
The same began months ago with closures of mining facilities, all on the account of a long-standing legal suggestion from the central government, but also because the powers that be decided to actually act upon that law en masse for the first time. The second bad news was the decision of the Peoples Bank of China to stop any crypto-related transactions and tell other Chinese banks to do the same. Now, with trading and investing practically out of the picture for Chinese citizens, the rest of the world began to get very worried as well. Yet, interestingly enough, despite the drops in price and market capitalization across the board, the adoption rates from ordinary users are still very solid. Instead of it taking a turn for the worse, it appears that cryptocurrency adoption remains steadfast in the current crisis.
Mainland China Moves
There has been a lot of coverage about the news coming from the key crypto territory right now, mainland China. Over there, certain policymakers and agencies have once more banned and directly forbid the use of bitcoin and general crypto transactions. These statements follow the enforcement of energy consumption limits on several bitcoin mines, along with an atmosphere of concerns about power consumption and environmental issues. However, no matter how drastic this all might sound, it is nothing new. Edicts and bands of all types have been issued by the Chinese central government during the last couple of years, practically in identical style and wording.
But, like clockwork, these bans, and announcements, as well as the subsequent ripple effects that they created put a lot of downward push on the crypto prices, dragging down not only bitcoin but also almost every other digital currency in circulation. If the anxiety that this produces is put aside, as well as the sheer level of volatility, much of this remains on the level of short-term noise. Bans have been around for a really long time and happened across economic and geographical lines, but ultimately none of them did succeed on any meaningful level. Instead, humanity is still left with a very poignant notion which is that people want a particular service or product. Once they do, they will find a way to reach it, practically no matter what obstacles society or laws put in between them.
Changing Crypto Landscape
It is hard to estimate what will these enforcements and bans lead to in the long run. However, there is no doubt that they are changing the current landscape in which cryptocurrencies exist. Also, making any prediction is the first step towards being wrong, so historically, that is also something that those more prudent among the pundits and experts will take into consideration. On one hand, countries like China are trying in some shape or form to ban crypto. Other countries, like El Salvador, are making crypto into an asset that will be formally recognized as legal tender in their national territories.
But, despite the noise and confusion that often comes with situations like this, there are still some valid trends that can be noticed and addressed. Like in esports and other dynamic ecosystems where many things are happening all at once, there are still some patterns that reveal themselves in the right circumstances and under the right influences. All of them are pulling and pushing crypto in one or another direction and some of them will have their way in the weeks and months going forward.
Bitcoin Leads once again
The return of BTC leadership is probably the most visible trend happening right now. In the recent bull market, there has been a lot of global conversation about the possibility of ethereum taking over as the dominant cryptocurrency network. There have been even more improbable suggestions for the change, like stablecoins taking on alliances with big financial systems. At the end of the day, neither flippening nor anything similar took place and the weak contenders for the crown are all gone now.
No analysts at the present moment are considering a digital currency taking over from bitcoin in terms of market cap or token price value. So, all those ideas that were so readily dispensed not long ago did not come to fruition and BTC is back in its ultimate role as the leader of the crypto pack. As that happened, people holding bitcoin are more likely to seem to those who do not like they were right all along. That even includes the prospect of losing money – the same prospect is short-term, but the role of bitcoin shows to future users that the cryptocurrency is here to stay.
Most crypto professionals, no matter if they are traders, developers, or investors, believe that the present level of instability and price volatility is coming to a close. Market uncertainty usually drives volatility and there are plenty of both elements in the current ecosystem. But, these are not actually hampering user adoption, being that even negative headlines make sure that people are aware of crypto.
Once more stability is attained, those hesitant about starting to use crypto might become less so and once they do, they too will create digital wallets or simply start using a service like Robinhood. So, even when things are rough for investors and traders, the sheer amount of chatter and the presence of these crypto networks in existence will slowly drive people towards adoption. At the same time, current adopters are not moving away from the same space.