Does crypto spot ETFs signifies the legitmacy of crypto?
A lot has been said about crypto being a scam over the years with others still disagreeing with that notion (including me). Back in the day, when the concept of crypto, NFT and Blockchain was still new, its knowledge was shrouded in darkness so just a few who had been among the founding members knew how it works and it benefits. People still thinks crypto and blockchain has nothing to offer other than cash in, cash out; not correct.
Here are some usecase and application of crypto and blockchain:
- As an Asset class: With the launch of BTC spot ETF backed by the crypto asset, most leading investment funds have underscored the use of BTC as an asset class including Larry Fink of Blackrock and Anne Richards of Fidelity. Stats available on mainstream financial aggregator has it that BTC spot ETF has constantly featured among the top 10 gainers in the ETF market.
- Acceptance of crypto as payment option: Global brands like Tesla, Ferrari, Honda, Alibaba, PayPal, Samsung etc have begun to accept some specific crypto as payment for goods and services. Even some leading global retail stores and educational institutions accepts crypto payments.
- Government hoarding of BTC: Governments like USA, Brazil, Ukraine, ElSavador, Argentina, Bulgaria, Sweden, North Korea all hold BTC with some claiming the source as seizure from proceeds of financial activities but the question is “why do these government still hold them if they don’t believe it as an asset class?”
- Increased ownership of BTC: Looking at stats from Forbes, Investopedia and Yahoo finance, 85.5% Indians, 27.8% Chinese, 20.5% Americans, 15.2% Nigerians, 14.3% Brazilians owns BTC and the numbers are increasing by the day adding to the growing popularity of BTC as an asset class.
- Use of Blockchain by traditional financial institution: The use of blockchain is gaining popularity by the day with Citibank pioneering the idea of tokenization of customers deposit on Chainlink blockchain in Q3 of 2023. Even Bank of China and JP Morgan’s Chase bank also announced plans to begin minting of Yuan and tokenization of customers’ deposits respectively on the blockchain.
Based on the most helpful WSO content, the legitimacy of cryptocurrencies and their recognition as an asset class can be influenced by the launch of crypto spot ETFs. These financial products allow investors to gain exposure to cryptocurrencies like Bitcoin without directly owning the asset, which can be seen as a sign of mainstream acceptance. Here are some points that highlight the use of crypto and blockchain:
Asset Class Recognition: The introduction of BTC spot ETFs by major investment funds and comments from influential figures like Larry Fink of Blackrock and Anne Richards of Fidelity suggest a growing recognition of Bitcoin as an asset class. The performance of these ETFs in the market can further solidify this view.
Payment Acceptance: Global companies across various industries, including automotive, retail, and technology, are starting to accept cryptocurrencies as a form of payment. This broadens the use case for cryptocurrencies beyond investment vehicles.
Government Holdings: Some governments are holding onto Bitcoin, which they may have acquired through seizures. Their reluctance to dispose of these assets could imply a belief in the long-term value of Bitcoin as an asset class.
Ownership Statistics: Data from reputable financial sources indicates a significant and growing percentage of populations in various countries own Bitcoin, suggesting increasing acceptance and popularity.
Blockchain Adoption by Financial Institutions: Traditional financial institutions are exploring blockchain technology for applications such as tokenization of customer deposits. Citibank's initiative with Chainlink and similar plans by Bank of China and JP Morgan Chase indicate a serious consideration of blockchain's potential in traditional finance.
These points suggest that both crypto and blockchain technology have moved beyond their initial stages and are being integrated into various sectors, indicating a level of legitimacy and potential staying power.
Sources: I'm in college and a millionaire because of crypto. Q&A, Do Bitcoin/Cryptos Have Intrinsic Value?, Crypt0 Bros - Are You Still Believers?, I'm in college and a millionaire because of crypto. Q&A, How to Get Started in Cryptocurrencies? General Crypto Thread
You’re mixing up crypto and blockchain.
crypto is a token used in an application of blockchain technology, like owning shares in a company.
I think the ETF makers are just trying to make money.
What you need to look at is how many real life applications are coming to market - that’s the real legitimacy. Everything up to then is just specilation
Yeah, crypto is like a currency used on the blockchain unlike digital currency.
And I think we are all looking at the misleading narrative of real world applications of crypto. In my opinion, crypto doesn't need to be spent or exchanged like real money or draft or bank order. Crypto is meant to be used to purchase items, to make illiquid assets like land, estate etc become liquid and increase liberality in the finance world like making anonymous transactions anywhere in the world for any amount on the blockchain. I've also noticed that a lot of industries are buying into the possibility of tokenizing real world assets using the blockchain. A case study is the recent testing of deposit/assets tokenization on Avalanche blockchain conducted by the Citigroup.
Here's the link: https://www.citigroup.com/global/news/press-release/2024/citi-collabora…
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