2018-12-13 01:42 |
Delphi Digital’s “The State Of Bitcoin” Report Confirms Bitcoin’s Growth And Increased Adoption
Digital asset invest firm Delphi Digital recently released a 59 paged report about bitcoin’s state of health, problems, comparative returns between bitcoin and other asset classes, bitcoin payments, current and future solutions as well as a plethora of other salient issues.
The report called “The State of Bitcoin” which is very exhaustive, is the first edition of the publication, and does a great job of proving the bitcoin’s value is not only growing, but that it’s evolving as needed and gaining increased mass adoption.
Provides A More In-depth Perspective About The CoinWhile there are groups and individuals who like castigating and badmouthing bitcoin, the reality is that the coin is quite valuable. The only bone of contention is in where it is exactly. The authors of the report understood this and made an effort to address this. According to them,
“In its current state, BTC is easier to dismiss than understand,” … “We believe the primary long-term value drivers for BTC revolve around its ability to serve as 1) a censorship-resistant store of value and 2) a ‘check’ on governments as an alternative, country-agnostic digital reserve currency.”
Anyone looking to get a fresh and clearer perspective on bitcoin will find the information in the report very helpful. It’s an insightful document, and one that any serious investor needs to read. In particular, it addresses its dual purpose as both a store of value and a medium of exchange.
It also looks at its increased adoption rates and possible triggers/causes. The first obvious thing is that bitcoin’s adoption rates have increased in low income and economically crippled economies in South America and Africa.
Of particular interest is its adoption in Venezuela. Africa’s adoption is largely due to a large population of unbanked residents and citizens. The report highlighted three key reasons for its growing adoption rate:
Allows citizens take full control of their funds and wealth, instead of depending or trusting traditional banks Serves as a viable alternative medium of exchange in countries with excessive inflation Faster transaction speed and very low transaction feesSurveys have shown that diaspora remittances to many African and Asian countries can be really expensive, with rates as high as 10-18 percent. MoneyGram and Western Union for instance, charge a 10 percent transaction fee. That can be a lot in these regions where people are able to get by with as little as $3 a day.
Borderless transactions using bitcoin will cost anywhere from zero to 2 percent. And depending on the transaction volume, recipients can get their funds instantly or in a few minutes. However, the report goes on to show that bitcoin’s use case extends far beyond remittances:
“In the past, when high inflation took hold in a person’s country, there was little that they could do except watch as their purchasing power evaporated,” …Now, “any person with internet access has the option to insulate themselves from local currency risk by switching to [BTC]. Essentially, bitcoin can offer a check on government power and policy while providing a vital safe haven for people from all around the world.”
Determining Future TrendsTo understand what the future holds for bitcoin, it is important to take a look at something called Unspent Transaction Outputs (UTXOs). A proper analysis of this can indicate where the market is currently, and where it’s headed in the short and medium term.
Delphi Digital analyzed the UTXO and concluded that bitcoin traders and investors are currently in the process of accumulating the token. According to the report,
“In the second half of 2018, the 1-Year UTXO band began exhibiting a positive growth trajectory directly in tandem with the 1-2 Year band as older UTXO bands remain flat,” reads the report. “We believe we are in the midst of an accumulation process taking similar to the one in the 2nd half of 2014.”
For investors who would like to know when the market will recover, the report states that following the UTXO analysis,
“Bitcoin may face additional selling pressure in the near-term, but we believe prices will bottom in Q1 2019 based on our analysis of holder dynamics during prior boom-bust cycles.”
Bitcoin And Its Reach For The Unbanked IndividualOne of the best things about bitcoin is its dynamism. Its multifaceted use and dynamic nature makes it an excellent cryptocurrency.
For instance, it can provide financial ease to rural dwellers without access to regular banking institutions, be a source of livelihood to another, can be provide a means of financial control, and even a store of value to countries’ central banks. The report highlighted the latter when it stated,
“There is a case to be made for central banks to hold a small portion of bitcoin in their reserves as a complement to gold if it matures into an accepted store of value,”…If the ~$1.4 trillion of gold reserves held by central banks grows at a similarly modest 2% rate per year, the expected value of bitcoin would be roughly $10,000 assuming a 25% chance it captures half the total value of future gold reserves … The upside potential for bitcoin is immense assuming it captures even a modest portion of the total assets held in offshore bank accounts, the investible gold market, and central bank gold reserves.”
Whatever you say about it, it is clear that bitcoin is both unusual and different. Its disruptive force is bound to always attract critics who fancy themselves expert on financial matters. What is clear however, is that bitcoin will continue to grow in value and innovation, and will continue to enjoy increased adoption among people who sorely need its solution.
The report’s outlook on bitcoin is great, and shows great potential for the cryptocurrency. Investors who are looking to profit from bitcoin trade or investment would probably do well to read the full report and digest its content.
More importantly, the investors who will benefit the most from using bitcoin as a store of value are those who have a long term perspective.
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