A major risk factor to the suddenly volatile stock market is not their ascension amid questionable economic metrics. Rather, it’s their surging on historically low volume. Simply put, most retail investors just don’t care much about equities. Instead, a new player has emerged: bitcoin and the complex surrounding cryptocurrencies.
Of course, that’s not surprising at face value. Once considered a fringe gamble by the mainstream business media, bitcoin has now become a mainstream metric. Moreover, the same media that decried bitcoin years earlier now cover other cryptocurrencies, such as ethereum and litecoin. However, this is not just an isolated interest, but represents a shifting tide.
According to digital fund raising and tokenization platform BlockState, the average internet user demonstrates more interest toward bitcoin than traditional investments, such as stocks, bonds, currency, even gold. Further, data from English-speaking countries confirm that the gap between digital and “analog” investments widened considerably.
Interestingly, Australians are more in tune with the internet as a vehicle for investment research. It’s no shock, then, that Australians have latched onto the blockchain and its financial potential. What is surprising is that the country itself is mired in an unprecedented real estate collapse. We talk about going off a cliff; Australia is hitting terminal velocity.
Yet the point remains: digital currencies have captured the attention of the investing public. Will this be a permanent shift?
Cryptocurrencies Dominating the Discourse
While I don’t presume to have a crystal ball, you’ve got to be incredibly bullish about cryptocurrencies replacing traditional investments. Whether you like it or not, the latter does not have the infrastructure to compete with the blockchain.
When I view the debate between bitcoin and stocks, I think about word processors versus typewriters. Sure, early word processors were cumbersome affairs. Also at the time, new users had to accustom themselves to the concept that what they typed didn’t materialize immediately. New innovations, such as hard drives and memory chips, made word processors possible.
I’m sure typewriter proponents poo-pooed the word processor as not being true to the writing process. But over time, the emergent platform worked out its quirks and kinks. Eventually, the phenomenal conveniences of computing made typewriting obsolete. When combined with the advent of the internet, even the idea of the typewriter became all but extinguished.
I think this is exactly what will happen with the blockchain’s integration into the mainstream. At first, resistance abounds. But when the average person finally learns first-hand the conveniences and power of the digital currencies, there’s no going back.