February 10, 2019
Why Is No One Interested In Bitcoin Anymore?
After an 80% drop from December 17th, 2017, and countless HODL posts on social media along with troves of memes about how sticking with it would pay off, it seems that Bitcoin is simply not attracting any interest anymore. It is easy to get excited by an asset that is worth more every day in terms of fiat. That is relatable to the average person. Nevertheless, when the bear market set in and prices started to plummet, Bitcoin lost its spark. Lightning Network, a remarkably stable outlook for the Bitcoin network with difficulty adjusting well to decreasing mining power, and more certainty after the threats of a contentious split subsided, cannot be marketed to the average person out there.
Technical Virtues & Strong Underlying Fundamentals are not Enough
It is difficult to blame the average investor for taking their money elsewhere. After all, most of the funding that was supposed to flow into Bitcoin – Wall Street money – is in the hands of people who profit from the flaws in the traditional financial system. These investors would have to live with the paradox of trying to make a fiat profit for their clients, on an asset that is an alternative to fiat. They are the intermediaries gauging whether it would be wise to pour their funds into a decentralized currency that was created to get rid of them. They don’t care about Lightning Network; they care about their jobs, their bonuses, and their fiat profits.
The Well Dried Up
Apart from this, they have a myriad of “safer” alternatives. The opportunity cost of buying Bitcoin is not investing in any other traditional asset that is insured against hackers. These investors would have to give up the comfort of getting a bail out through tax payer money or quantitative easing if they make mistakes worth billions of dollars, to join the real capitalist system. Moreover, they would have to do that when Bitcoin prices are already down, thinking that it has no real upside. Who can blame them?
Bitcoin Lost its Sparkle
That is exactly why Bitcoin is not interesting anymore. Main Street people are no longer mortgaging their houses or maxing out their cards to buy some. As far as conventional Wall Street wisdom goes, if there is no one pumping the bubble with debt, then there is no money to be made. As interest rates climb back again, there is less disposable income for average people to pour into an esoteric form of cash that exists only on a quirky network that not enough people understand. It is time to buy some credit default swaps again, as interest rates rise and more Main Street people face bankruptcy. That must have a lot more upside than Bitcoin and all its positive developments right now!
*This article does not constitute investment advice of any kind.