Why the Word Crypto Is Creeping Into Fashion – Part I
Crypto is creeping into fashion. If you don’t know this, you should. Bitcoin was created in the aftermath of the 2008 financial crisis and it has been defined as: a protocol, a currency, a payment system, a technology platform, or an open source software.
Venture Capitalists like Mark Andreessen understood the technology quickly and were its early adopters, but regular investors were slow to warm up to it.
Bitcoin’s high volatility, large number of scams, and reputation for being the preferred currency for criminal activity did not help the adoption process. Despite its ups and downs, its market capitalization continued to climb and recently reached one trillion dollars.
As of today, investing in it is still very risky and determining the exchange rate is almost impossible. Governments don’t back it up and it has no fundamental value. An interesting theory states that what matters in determining the exchange rate is the payment transaction volume and its continuity:
“Bitcoin exchange rate can be fully determined by two market fundamentals: the steady state transaction volume of Bitcoin when used for payments, and the evolution of beliefs about the likelihood that the technology survives”.
With all the problems Bitcoin has faced in its short existence the question remains: Bitcoin, fad or future? It looks like the answer depends exclusively on whether there are reasons for it to exist.
In the next installment of this article we will try to understand whether crypto fashion, NFTs, and crypto fashion shows have intrinsic value or are just serving as Bitcoin’s much-needed raison d’être.
Know something we don't? Email us
at [email protected]