A string of breathless media headlines reporting Bitcoin’s new highs and lows means the cryptocurrency has captured popular imagination; the appearance of the Coinbase iOS app within the top 40 lists at the App Store helps confirm the notion.
Bite of the Bitcoin
Apple co-founder Steve Wozniak recently said he thinks Bitcoin is a better standard of financial value than gold or the dollar.
While we have to accept that the inherent value of the digital currency is hard to understand, it’s clear that millions of people do believe in it and that consensus has driven the digital estate to new highs.
That’s not to say cryptocurrency is a safe investment — it isn’t, it’s highly volatile, and (at present) can too easily see its market values impacted by tactical buys and sells on the part of the biggest Bitcoin investors.
However, that volatility should become less extreme as institutional investors enter the fray (from CME to Nasdaq), as I suspect they will be looking to stabilize trading in order to enable big business to use the currency as a way to shift large numbers between nations without paying the currency exchange fees. (Let’s face it, they’re already doing a great job “defining their own tax rates“.)
In the other corner, you see the individuals.
Savers are experiencing low interest rates and cost of living increases that mean if you leave your money in the bank, it becomes less valuable each year.
This has been the situation since 2008 austerity bit.
Almost a decade later, those concerned for their old age are searching for profit centers to help them save for their retirement. Stocks are risky, futures are sometimes unethical, and small business activity is shrinking. Bitcoin offers them hope.
That’s the background that is leading people to take a bite of the Bitcoin because it feels like the only game in town.
In the past year, the price has increased over 1,200 percent, and people want in. I can’t stress enough that the market is so volatile you should never risk more money than you can afford to lose. Meanwhile, we see Wall Street Journal headlines like, “Bitcoin mania: Even grandma wants in on the action.”
ABOVE: Apple is exploring its own ways to support digital currency
Mass market wakes up to Bitcoin
Recent weeks have seen Bitcoin activity ramp up.
We’ve seen big investors predict prices could reach $40,000; we’ve seen old-time bankers (conveniently ignoring their place in creating austerity conditions in the first place) condemn cryptocurrency; we’ve seem PWC accept a fee in Bitcoin — and we’ve seen Bitcoin cross the $10,000 barrier.
What seems to be the world’s most reputable cryptocurrency exchange, Coinbase, has doubled its user base in the last year, with trade volume up eight-fold. It now has over 10 million customers.
“At a high level, I think we’re seeing a massive increase in the number of people who are buying their first digital currency,” Dan Romero, vice president of operations at Coinbase said. “We’re finding a lot of new people coming into the ecosystem.”
This rapid growth poses problems — November 29 saw major cryptocurrency systems fail, meaning many Bitcoin investors were unable to sell at the top of the trade. (Bitcoin is unregulated, volatile, and not everything works as it should. Be warned. And if you do invest, follow this chap.)
Here come the Apple users
“Apps may facilitate transmission of approved virtual currencies provided that they do so in compliance with all state and federal laws for the territories in which the app functions.”
That was then. Today a look through the top apps on Apple’s iOS App Store shows the Coinbase app in the top 40 (or higher). This reflects the rapid growth in that service’s user base, but I’m going to make a few predictions on the back of it:
- We know iOS users are active and engaged tech users. If they use an app more than a couple of times, they will keep using it.
- We also know iOS users tend to have higher disposable incomes. That means that if they want to invest, they can.
- Finally, we know iOS users are digital natives who make full use of their technologies.
In combination with the popularity of the Coinbase app, these three insights suggest a new breed of mainstream but tech-savvy investors is now exploring cryptocurrency. This underlines just how much things have changed — and will change.
Bitcoin has hit the mainstream.
But please don’t risk more than you can afford to lose. Just because everybody is doing it, it doesn’t mean it’s safe. So, do your research before you gamble.
Full disclosure: I own a fragment of a coin. I’ve lost money so far.
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