Category Archives: CME Group

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Only 3% of Americans Bought Something With Bitcoin Last Month, A 5-Year Bet Reveals

A recent podcast by Planet Money, reflected on a bet made 5 years ago between Bitcoin bull and venture capitalist Ben Horowitz whose firm has made investments worth over USD 50 million into crypto and financial journalist Felix Salmon, paints a peculiar angle on Bitcoin adoption.

The bet which hinged on the adoption state of Bitcoin in 5 years as currency, had Horowitz predicting that it would have revolutionized the face of e-commerce such that 10% of people living in the US would use the currency for frequent online purchases. This happened back in 2014 when Bitcoin’s price wavered around USD 360 to USD 760.

Meanwhile, Salmon was confident about his bet, stating how Bitcoin’s value will indeed increase but not because of its use but rather based on a speculative rise in value. He cited how those who bought Alpaca socks using Bitcoin would regret, noting the price increase, and would have preferred sitting on it rather than spend it.

A sample pool survey was recently conducted to know who had won the bet – gauging how many Americans currently use Bitcoin for everyday online purchases. The bet was concluded recently, having to declare Salmon the winner, as only 3% of 900 Americans had actually bought something with Bitcoin in the past month.

Real Adoption

The mainstream real adoption of Bitcoin can be approached from three angles: One, where people who actually buy the coin become long term holders (store of value), hoping the price will reach astronomical highs and cash in on the ‘patience-profit.’ The second, where cryptocurrency adoption has been heavily facilitated by payment infrastructures such as merchant adoption, and the increased installation of Bitcoin ATM kiosks. The third has to do with the introduction of sophisticated markets such as futures contracts and exchange-traded funds (ETFs) for institutional investors.

Regardless of the adoption route, most of the early sentiments were founded upon hysterical predictions based on the assumptions that Bitcoin and its underlying technology had come to replace legacy financial systems and hence prices would go as high as USD 50,000. However, these sentiments have been counterbalanced by a rather economically bearish one that renders the initial logic as heavily flawed.

The outcome is a juxtapose of a computer science-based backing of the blockchain, Bitcoin, and cryptography, as against economic assessment of currency functions and financial asset manipulation. More so, many now rely on the economic aspects for further adoption at this point. This is the case with the constant lookout for institutional grade investment opportunities like those of the Bakkt; in the hopes of repeating what CME Group and CBOE’s Bitcoin futures contract did in late 2017.

It is clear though, that back in the early days of the industry’s development, very important structures such as scalability, and regulations were of little concern, and may have consequently cost the industry years ahead of a full-blown mainstream adoption of Bitcoin.

Over time, many influencers have taken turns on the prediction wheel; John McAfee had his predictions set to USD 1 million per Bitcoin; Thomas Lee thought at best case scenario, it would reach USD 25,000 in the past year but later on blamed regulatory uncertainty for falling short. So far, none of the near-term predictions have materialized. If anything, Bitcoin as a currency has struggled to maintain upward price projections, and as a store of value, it’s really still too soon to tell – 10 years into its development.

One thing is certain, treating Bitcoin like some gambling chip is a lot riskier than the real deal. While the tech does hold promise and has ushered in prospects of a great financial revolution, the subject of adoption will apparently continue to be an important one many years from now moving forward.

On the tech side, industry adoption has been growing consistently with legacy systems fine-tuning system processes using the distributed ledger.

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Congressman Invites Crypto CEOs to Capitol Hill for SEC Legislation Talks

A US congressman has invited 32 prominent representatives of the cryptocurrency industry to Washington in order to discuss future ICO legislation.

Warren Davidson, the Republican representative for Ohio is to discuss measures to be introduced by the Securities and Exchanges Commission (SEC) this coming autumn after discussions between the Commission and Davidson’s office.

Davidson sits on The United States House Committee on Financial Services, which is responsible for overseeing the entire financial services industry, including the securities, insurance, banking, and housing industries.

Those representatives of the industry invited to Capitol Hill for the September forum are listed as Andreessen Horowitz, Circle, CME Group, Coin Center, CoinList, Harbor, Intercontinental Exchange, Kraken, Nasdaq, Ripple, Union Square Ventures and some others.

Congressman Davidson describes the meeting as design to offer a “light touch” to current ICO regulation before the new bill goes to US Congress later this year. He commented:

“I intend to lead legislation for initial coin offerings to clarify the role of regulators, protect consumers, address national security concerns, and facilitate a pro-growth environment for businesses to raise capital.”

The forum is an interesting development, in the sense that until now there has been little direct interaction between the SEC and leaders from within the cryptocurrency industry. Although Davidson is not actually a member of the governments’ regulatory body, his subcommittee on the United States House Committee on Financial Services does oversee SEC work and has significant influence.

The congressman is thought to be discussing existing issues within the industry in the forum, such as unsuccessful ICOs and the difficulties of some to go public, along with the formulation of clearer rules to cover the diversity of tech companies entering the market.

Another factor which is sure to be raised by the industry representatives gathered on September 25th is SEC requirements and rules, as they apply to the cryptocurrency industry as a whole.

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