The Truth is, Bitcoin May Take Some Time Before Going Mainstream
- Investors need to understand that Bitcoin must be used in order to reach mainstream adoption
- Bitcoin must move away from being a commodity
There have been many discussions on whether Bitcoin (BTC) is going to be reaching mainstream adoption in the near future. However, it may take some more time before virtual currencies reach a larger number of users around the world.
Will Bitcoin Reach Mainstream Adoption?
During the last years, the crypto community has been talking about institutions entering the cryptocurrency market. With their presence in the market, many enthusiasts expected the crypto market to become mainstream and reach a larger number of users from all over the world. However, crypto adoption is not taking place as fast as many would desire.
There are several institutions that have already entered the space and that are trying to increase crypto awareness with their products and services. For example, Fidelity Investments, one of the largest asset managers in the world, informed that they are testing a crypto trading platform for larger companies.
At the same time, another important company that is trying to offer solutions to institutions is the Intercontinental Exchange (ICE) through its Bakkt platform. On July 22nd, the firm launched a testing phase of its new project that aims at offering Bitcoin futures contracts to larger investors. The ICE is the parent company of the New York Stock Exchange (NYSE).
Although institutions can help Bitcoin price grow and give legitimacy to the market, they may not be able to increase crypto adoption.
One successful case of cryptocurrency adoption is related to Venezuela and how individuals in the country have been using the most popular digital asset to purchase goods and services. At the same time, due to hyperinflation in the country, Bitcoin could work as a store of value.
It is worth mentioning that Venezuelans didn’t have free access to a foreign currency which led to citizens paying higher prices for them in the black market. Although there were controls on the internet, Venezuelans were able to use Bitcoin and other digital assets in a real way rather than just speculation.
The number of Bitcoin ATMs around the world is also growing. According to CoinATMRadar, there are more than 5,200 ATMs in 77 countries. However, over 70% are located in just 2 countries, the United States and Canada. The remaining number of Bitcoin ATMs is located in other countries, but just a few of them are currently installed in developed countries.
In general, most of the ATMs are used by individuals that have no economic issues or that do not need virtual currencies as a tool to avoid economic problems, like in Venezuela. The number of ATMs should continue growing in countries in need where Bitcoin would make a clear difference. Nevertheless, these jurisdictions are usually very aggressive against crypto projects and companies. In India, a crypto ATM was installed and the government shut it down in just a few days.
There are also some companies such as Coinbase or Binance that are working in order to offer more services to increase crypto adoption. Although this is not an easy task, these efforts will clearly help the whole industry and they will allow new users to enter the space.
Binance is a clear example of offering services in countries that tend to be out of the radar of crypto companies. The firm is currently offering a fiat to crypto exchange in Uganda and they have plans to expand to other countries in the future.
Square Crypto, a recognized cryptocurrency user on Twitter, said that Bitcoin is going to go mainstream once the digital currency stops being a commodity and it starts being a necessity for users around the world.
Meanwhile, Samson Mow, the CEO of Blockstream, said that there are just users and as a store of value, Bitcoin is not going mainstream. He compared it to gold and how it didn’t go mainstream.
Furthermore, Mow said that layer 2 technology, including the Lightning Network (LN) is what will make Bitcoin mainstream in the future. With the Lightning network, it will be possible for firms and users to start sending and receiving payments in BTC in a fast and easy way.
At the time of writing this article, Bitcoin is being traded around $10,000 and it has a market capitalization of $178.54 billion according to data provided by CoinMarketCap.
Companies whose futures depend on the success of bitcoin should create roles that deal exclusively with making the case for mass adoption to the general public. We go mainstream when bitcoin stops being a community and starts being a necessity. 🌚
— Square Crypto (@sqcrypto) July 22, 2019