Source: The Daily Degen editor @Rektdiomedes
Translated by: PANews
In the spirit of the cryptocurrency industry having “died” many times and risen again each time, we’ve analyzed the top 10 reasons why the cryptocurrency market will not only survive, but thrive and even explode in the coming years.
Reason 1: Stablecoins have begun to play the role of "dollar as a service"
Today, stablecoins have proven to be a "sticky use case" for cryptocurrencies, especially in the current environment where there is such a huge demand for the US dollar worldwide. Fundamentally, stablecoins are a simple concept, but they have some specific advantages, such as: programmable, permissionless, borderless, low-cost, fast settlement, interoperable, high liquidity, etc.
For people in developing countries, stablecoins are playing the role of "dollars as a service", which is already evident in countries such as Pakistan and Argentina, where people can send money around the world without having to go through multiple complex "middlemen". Not only that, on-chain stablecoins mean not only a better monetary system, but also a better "legal" system. Ethereum provides reliable "law" (code is law) on a global scale to anyone with an Internet connection. Stablecoins and smart contracts will become an integral part of the global economy, just as we cannot imagine the world today without the Internet.
Reason 2: Cryptocurrency has better payment efficiency
Anyone who has run an online business using on-chain stablecoins knows that crypto payments are 100 times more efficient than using “old-line” companies like Payoneer/Wise, which can sometimes be a nightmare because they are not only inefficient but also have to comply with some outdated management requirements.
Regarding this issue, fintech analyst Boaz conducted an in-depth analysis on his personal social media , listing 7 current cross-border transfer solutions of traditional financial institutions, but unfortunately, each of them is extremely complicated. In contrast, you will find that with the rise of Layer 2, the cost of the chain is becoming lower and lower, and with the support of stablecoins, a payment tool that is significantly superior to traditional banking has been created.
Reason 3: Cryptocurrency is being adopted by more institutions
For now, the likelihood of a spot Bitcoin ETF being approved is increasing, and more and more authoritative institutions in the financial industry have also expressed their support for Bitcoin (and in many cases DeFi). In fact, Wall Street seems to have figured out a truth - it would rather make money from the public's enthusiasm for cryptocurrencies than try to fight it.
In this regard, no one seems to see it more clearly than BlackRock CEO Larry Fink, who called Bitcoin "a money laundering tool that is widely used for illegal gains" in 2017, but by 2023 he had changed his words and said that "Bitcoin is very international and will surpass any currency and can become an alternative international asset, similar to 'digital gold'."
Reason 4: Privacy/Account Abstraction
Currently, many projects lack support for privacy, which also hinders the adoption of encryption technology by mainstream business needs. However, this situation is changing. Privacy is very important in financial transactions. As Vitalik Buterin said, "Without [privacy], Ethereum will fail because all transactions (and POAP, etc.) are open to anyone to see." The most significant effect of increasing on-chain privacy protection will be to promote the migration of more "traditional businesses" to the chain, such as AP/AR, payroll, balance sheet management, accounting, etc.
Reason 5: The global economy is becoming increasingly digital
Over the past 10 years, global commerce has become increasingly "online" - remote work, cryptocurrency, artificial intelligence, social media, etc. have all become part of onlineization. As this evolution accelerates, the advantages of Internet-native crypto assets/infrastructure will become increasingly apparent compared to existing bank-based systems that are not adapted to the online world. Today, the global economy is becoming increasingly flat, a trend that is good for cryptocurrencies, and the applicability of cryptocurrencies is becoming stronger. In emerging markets such as Nigeria and the Philippines, online economic participants have basically been able to not rely on the traditional global banking system.
Reason 6: Dollar Depreciation/Reflexivity
Obviously, there is no political will for fiscal tightening in the West, and even Powell's interest rate hike can only highlight the problem of fiscal dominance. The surge in US interest spending has led to a further expansion of the budget deficit, which has created a "fascinating" feedback loop in which the depreciation of the US dollar has increased the nominal price of crypto assets and further catalyzed the speculative boom, thereby stimulating public interest in cryptocurrencies and promoting adoption.
Reason 7: Personal sovereignty
Places like the US, Canada, and Western Europe are in social, cultural, demographic, economic, and other decline. It seems to be an indisputable fact that as things inevitably get worse, and the aforementioned sovereign debt crisis escalates, the permissionless and self-custodial value support provided by cryptocurrencies becomes incredibly important.
Reason 8: “Fateful” bullishness
Against the backdrop of a more dysfunctional global economy, the traditional upward mobility path seems to have become less realistic for ordinary people. More and more people hope to become "rich overnight" through speculation, and therefore turn their attention to the cryptocurrency market. This is actually the background of the "fatalistic optimism" of cryptocurrency.
Although this idea is not worth encouraging, it is also an important variable that drives the cryptocurrency market upward.
Reason 9: Alignment with corporate culture transformation
In traditional companies, everyone works in a cubicle, which has also triggered a strong rejection of this kind of work culture. This paradigm shift has been going on since the 1990s and has accelerated in recent years. Cryptocurrency conforms to this "rejection" trend in many ways. To a certain extent, the transformation of corporate culture is a downstream effect of the digital economy and also represents a positive change in people's spirit.
Reason 10: Intellectual Capital
The last reason is actually very simple. The reason why cryptocurrency continues to grow is that it attracts the smartest, wisest and most creative young people on the planet. The greatest thinkers of our generation are building in various fields of the on-chain economy. Rather than betting on cryptocurrency, it is better to bet on this huge source of intellectual capital.
Do you think there are other reasons? If you have any comments or opinions on the above ideas, please let us know!
