Is Digital Currencey Still Hard To Grasp?
Is bitcoin all just in a name? Does much of the current dip in the price of digital currency come down to traditional investors not understanding the new narrative of the digital currency industry? Cryptocurrency is no longer a new thing, and while there doesn’t seem to be a single minute that passes without more news about cryptocurrency developing worldwide, there are many people, from investors to everyday people who still see this digital currency as a party only for people in the “know” and not something that anyone can get involved with. Which is simply not true.
While digital currency can still be viewed by many as an emerging technology, it is the understanding of the words surrounding it all that may be keeping some new investors away. Not only this, but the Crypto community themselves are also struggling with pinning down the narrative of Bitcoin, the hard part of the “sell” is that the community’s narrative does not match with the investors traditional narrative. Coin Share’s Chief Strategy officer, Meltem Demirors gave an interview with CNBC this week where she addressed this very issue:
“What institutional investors are looking for even retail investors, what is the narrative? Really the only metric we have for most Cryptocurrencies is the price, and price is such an imperfect metric. What does actual utilisation look like? That’s really the struggle for Crypto right now.”
But being new and using different terminology, for example, the word price over the word stock is just something that investors will eventually have to get used to. Currently, there is an undeniable dip in price from a few years ago. But historically it takes time for new technologies as a commodity to bed in, for people to see not only a return on investments but a more even and less volatile price fluctuations that are we are experiencing right now.
We did see a massive run-up to cryptocurrency where lots of people, through fear of missing out bought into digital currency, thus driving the price sky high, but this is nothing new with new technology. Demirors suggests Amazon as an example. From peak inception where investors got excited and invested in Amazon, the price fluctuated considerably, taking 9 years for Amazon to recover its original value. It was the same story with Intel, but it took even longer to recover, 15 years in fact. Digital Currency is a story that will take time, it will take a while for the new narrative to embed into the investors’ conscience, and thus it will take time for it to stabilise and recover. But as Demirors was keen to impress in her CNBC interview this week, is that real traction is starting to happen with Crypto right now, which will service to drive value and growth.
Demiors goes further suggesting that cryptocurrency is still using only a mere fraction of the future the total market it can encompass. From speculation investing which is what we are largely viewing today to end users. Once digital currency is firmly entrenched into people’s conscience, once trust is built and people start to use it as a capital runway then that is where the digital currency ecosystem will really gather traction and sustainably.
By Joy Lewis.