The Converging of Wall Street & Cryptocurrency
Much has been made about the ups and downs of the cryptocurrency market, with the explosive boom and bust now giving way to slow, but steady, recovery. Of course, the early history has been driven by a mix of innovators, speculators and enthusiasts of the underlying technology. With the market beginning to mature, however, the arrival of institutional capital promises to be a game changer. Although Wall Street has been increasingly flirting with cryptocurrency, it has been a relationship defined by false starts and baby steps. As cryptocurrency continues to become more and more difficult to ignore, its relationship with the world of major finance seems destined to be a matter of when, not if.
The partnership of Wall Street and the blockchain has not been full speed ahead, but rather two steps forward, and one step back, an equation that still ultimately results in forward progress. Wall Street giant Goldman Sachs announced plans to open a Bitcoin trading operation, but scaled back the campaign due to lukewarm response and regulatory delays. Similarly, the International Exchange, parent company of the New York Stock Exchange, have delayed the opening of their cryptocurrency exchange, with lack of regulatory approvals proving to be a hurdle. Chicago Board Options Exchange have also stalled with their Bitcoin trading contract.
At the root of the hesitation are concerns over regulation, security, price manipulation and a ‘wait and see approach’ that has many wondering what the ultimate function of cryptocurrency will be within their portfolios. While some have taken on a venture capitalist mindset, seeing early adoption as a gateway to large upside as values increase, others see opportunity on the service-provider side.
Still, there can be little doubt that the interest is there, which will ultimately provide an infusion of capital into crypto markets. Cryptocurrency’s underlying blockchain technology continues to gain widespread acceptance, with more and more applications being adapted all the time, making it impossible to ignore. Meanwhile, markets have grown increasingly stable, having survived several rounds of bubble and burst. Bitcoin value, although down from its heady highs, remains significantly more valuable than it was prior to the first bust, in 2013, showing an overall positive trajectory.
Futures Markets and JPMCoin
One aspect of cryptocurrency speculation that has seen approval and uptick is the futures market. In this form of trade, investors are able to essentially bet on the price movement of Bitcoin without actually holding the currency. The CME (Chicago Mercantile Exchange) has introduced a Bitcoin futures contract, which has seen moderate success, and Goldman Sachs are considering following suit.
Meanwhile J.P. Morgan have introduced their own coin, JPMCoin. The bank’s leader, Jamie Dimon, has long been critical of cryptocurrency, yet has decided to proceed with the coin. Critics have cried foul, however, as the critical function of JPMCoin will be internal, with it being used to facilitate a fraction of cross-border payments with clients, putting it at odds with cryptocurrency’s ‘permissionless’ ethos.
Regardless, the cumulative effect of these developments is a demonstrable interest in cryptocurrency, which could prove to be a gateway to increased involvement in the near future.
One substantial advocate of Bitcoin is Jack Dorsey. The chief executive of Twitter, who is also the founder and CEO of online payments company Square, has been vocal in his support for the currency, stating that it is ‘native to internet ideals’ and even going so far as to predict that it may become the world’s predominant currency within 10 years. He has compared cryptocurrency’s ups and downs to the early days of the internet itself.
Dorsey’s comparison of the internet and cryptocurrency is apt: the internet went through growing pains as various interests struggled to define its nature, but ultimately the technology’s unlimited potential could not be stifled, it was always destined for ubiquity. As blockchain technology becomes increasingly mainstream, and cryptocurrency’s widespread capacity becomes undeniable, it is poised to continue its ascension, with early adopters being joined by the mechanisms of mainstream capitalism.
The takeaway, of course, is that now is a great time to get on board with Bitcoin and other cryptocurrencies. JV Driver are a leader in crypto facilities, offering fully customizable mobile cryptocurrency mining equipment at an affordable price. All you need is a suitable location, a source of power and an internet connection, so visit jvdriver.com/cryptoand get started today.