Bitcoin Turns 10: The Not So Shiny New Penny.
Today — October 31, 2018 — is the 10th anniversary of bitcoin. What this means is that ten years ago today, Satoshi Nakamoto released the bitcoin whitepaper that changed the course of our finance conversations forever.
With a price that has increased 10.6 million percent over the past eight years and a currency that hit its year-to-date highs in mid-September with dominance over the entire cryptocurrency market, bitcoin is not going anywhere. However, many have predicted that the bitcoin market in its second decade will be significantly less successful than in its first, citing recent drops in bitcoin’s price, as well as for other prominent cryptocurrencies.
Why It Matters
- Over the past decade, bitcoin’s price rose from 0.06 cents to $6,421, according to Forbes
- Bitcoin’s price soared 1,375% in 2017 as celebrities and financiers took an interest in the cryptocurrency, according to the Wall Street Journal.
- Bitcoin’s dominance of the total cryptocurrency barely dipped below 80% until March last year, according to CoinMarketCap data. But it has lost ground to the likes of ethereum, ripple (XRP), bitcoin cash, litecoin, and dash since then.
- Right now, bitcoin’s price is down more than 60% from last year’s record high, according to data from CoinDesk.
- Recently, some of the largest, most well-established cryptocurrencies have dropped the most. Ether, the second-biggest cryptocurrency after bitcoin, is down 51%, according to data from CoinDesk. Bitcoin Cash and EOS have both dropped 28%, as stated by the Wall Street Journal.
- According to data from Blockchain.info, the logged daily transactions in the third quarter of 2017 which averaged 217,000, were well below the 319,000 daily average in 2017’s frenetic fourth quarter.
Naturally, investors will be watching the bitcoin and cryptocurrency market day in and day out, and over the next ten years. We as communicators in the finance sector must do the same but through a different lens. It will be important to remain educated on these matters and follow trends closely — not just financially, but in public perceptions and business acceptance, as they can change as often as the market does.
Currently, according to a poll done by Gallup and Wells Fargo in May 2018, a majority of investors (72%) are not interested in ever buying bitcoin. While a handful (26%), are intrigued by bitcoin, they don’t plan on investing any time soon. In addition, while owning bitcoin is more common among wealthier investors, just 3% of those earning $90,000 or more report owning bitcoin, compared with less than 1% of lower-income investors. Much of this slow roll to actually invest is because most investors find bitcoin very risky.
However, millennials more easily and regularly trust bitcoin as a place to invest for the long term, as opposed to older generations, according to a June 2018 study by Bankrate. For some, this indicates a likelihood that bitcoin is going to stick around and increase in importance and popularity. In other words, many think bitcoin is going to persist as a 21st century feature of our modern economy. While the cryptocurrency often finds its way into headlines and is greeted with much fanfare, and millennials audiences are less skeptical, it appears broad public acceptance remains elusive.
We should expect the aforementioned perceptions in the marketplace to bring about new avenues in digital currency over the next decade. The same way that bitcoin and cryptocurrency rapidly took the market by storm, it’s very possible that a new form of crypto will do the same, captivating the minds and wallets of investors, average Americans, and our clients. Public perceptions are fickle and can swing quickly to the latest and greatest market fad. For the public to get on-board, changes will be needed, or in the very least a heavy education campaign, to shift perceptions and make Bitcoin or other cryptocurrencies more viable for the average investor or consumer.
If the rise of bitcoin has shown us anything, it’s to be wary of a risky situation but to embrace the potential of something that could change the course of any sector. You can expect bitcoin’s journey to continue, and we’ll be along for the ride to see where it goes from here.