Bitcoin prices continue to remain a crucial stakeholder with regards to the future of the cryptocurrency space as incoming users, with no in-depth prospect for application to cryptocurrencies remain reliant on how good the ‘cash out’ price they will get. There is a general notion about BTC to have become a store of value or an investment asset. This has created an excess of incumbents that would focus on the buying and selling prices, instead of using it with the intent of transacting.
This market is currently structured in a way that encourages newcomers to invest in BTC or other cryptos when the market is down and to cash out when they get a better rate. A part of this owes to little or none institutional involvement in the space. Something Kelly was keen to mention. Delphi Digital Co-Founder Kevin Kelly shared his thoughts on how crucial Bitcoin prices will prove to be regarding mainstream cryptocurrency adoption in conversation with BlockPublisher. He stated:
Unlike other markets, the crypto space is still very much driven by retail investors. We’ve seen some developments on the institutional front, but nothing close to their involvement in traditional asset classes.
When we think of the future, it is hard to envisage Bitcoin price as not being as crucial as it is currently to drive the cryptocurrency space. This can be verified from users’ tendency to focus on the buy and trade element more than the application front. Kelly pointed this out as:
Many early “users” of Bitcoin were speculating on BTC prices rather than purchasing BTC with the intent of actually transacting with it. Going forward, BTC prices are hard to ignore for incoming users, but the fungibility of BTC allows for products and services to eventually be priced at comparable levels to today even if BTC prices appreciate substantially.
In hindsight, if there were regulations and moniterization in place for Bitcoin and concurrent cryptocurrencies, it would have given the space a wing to fly with over the long term. Only time will tell if we ever get to a point where that happens.