We’ve seen many bursts like this before that prove to be short-lived, especially those that occur over low volume weekends. Further, the Crypto Fear & Greed Index(which measures volatility, sentiment, momentum and trends) is at all-time highs, which has generally been a leading indicator of crashes. But even if the market pullbacks from these levels, the long-term trend is still quite favorable for Bitcoin and a handful of other tokens capable of accruing long-term value. As seen below, the drops are becoming faster and less pronounced, and we’d expect a similar response should this happen again.
As we’ve been discussing for months, we think this is undeniably bullish for digital assets, because best distribution always beats out best technology.
The crypto world is very good at creating groundbreaking technology, but new technologies without distribution often fail. Robo-advisors are a good analogy. Betterment and Wealthfront have amazing technology, but this technology was easily replicable by financial advisory powerhouses with larger distribution capabilities. So what happened? Every major financial advisory firm now offers similar technology services to their clients. Distribution and brand trumped technology.
The fact of the matter is Facebook’s Day 1 will be bigger than any other digital asset’s year 10. Facebook will bring over 2.0 bn people into the digital asset ecosystem overnight, which further supports the notion that both communication (via internet) and assets (via blockchain) can travel seamlessly and without borders. And once a new person enters the digital assets ecosystem via Facebook, they will begin to find other digital assets as well. And let’s face it, the size of the current crypto ecosystem is dwarfed by the size of the non-crypto ecosystem. So in a roundabout way, Facebook’s Coin competing with Bitcoin and other digital assets will actually help spur more Bitcoin adoption. For example, Angry Birds somehow made it onto every iPhone in 2010 whether you were a gamer or not. It doesn’t really matter what gets you into the ecosystem; once there, every blockchain app, and every digital token, becomes much more readily accessible.
So ultimately this is positive for every digital asset, with the exception of other stabletokens. GlobalCoin may ultimately eat other stabletokens’ lunch, as Facebook can actually solve real problems - giving asset storage options for millions of unbanked consumers, and lowering banking costs for merchants who accept GlobalCoin as payment.
As Meltem Demirors from CoinShares said:
[This will] allow Facebook to introduce payments into its platform without the hassle of becoming a bank or creating a financial services company. My prediction: every major platform will eventually become a "bank" of sorts”. The foray into corporate coins has been going on for some time, but GlobalCoin is definitely the BIGGEST given the 2.5 billion users across Facebook, Whatsapp, and Instagram. The HEAT is on! Every board room will be deliberating this move.
We may remember Tuesday, June 18th as a tipping point for crypto.
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