when one begins to consider the “casualties” of 2022, it becomes abundantly clear just how many Crypto investors are rather unconcerned with self-custody. For many, that has perhaps since changed. Loss and potential loss are completely different and are also uniquely interpreted by the human mind. Most people enter a casino with the understanding that they are likely to lose money. However, for many, this is not fully embraced, as they reason within themselves that it’s not going to happen to them.
Although many knew the risks of holding assets on an exchange, they still chose to do so. In many ways, it reveals just how important, or unimportant self custody is to them. Such an investor is primarily concerned with securing a profit, as opposed to securing their assets. Furthermore, the “advancement” of memecoins in 2021, once again revealed that despite the risks, the primary objective is to realize significant gains.
There are those amongst us who entered Crypto for more “noble” reasons, even though securing a profit was definitely one of them. For such investors, self-custody, decentralization, and even privacy are rather important. However, if we are, to be honest, the majority of Crypto investors have arrived solely with the intention of enriching themselves. This is not true “adoption”, and in many ways does little to help the “cause”.
Real Use Case & Adoption
A busy blockchain inevitably becomes a successful blockchain. Purchased coins that lie around on exchanges are doing very little to aid their native blockchains, apart from reducing the liquid supply. “Movement” and utility ultimately create demand, and demand creates price appreciation. Ironically, those who invest in blockchains with the intention of profit, but choose not to utilize them are essentially opposing their own intention.
True adoption and utility are at the very foundation of a blockchain’s success. Remove these two aspects and all you have is the “greater fool” theory, which Warren Buffet loves to associate with Cryptocurrency. Sure, there are definitely cases of this being true. However, it cannot be used as a blanket statement to describe Cryptocurrency. There are many blockchains that offer and hold tremendous value for both the business world and society as a whole.
Blockchains that are experiencing high transaction volumes, and even more importantly, increasing transaction volumes are worth keeping an eye on. Even a coffee shop that is full of people consuming low-cost items will attract even more customers than an empty restaurant that is perhaps offering a more attractive menu. This is one of the unwritten and perhaps, unexplainable “rules” of business.
Simply assemble a large group of people in the vicinity of a particular store, outlet, or coffee shop… and watch it begin to fill up. The “hustle” and “bustle” attracts curiosity and eventually, visitation. Even if nothing much is taking place in terms of sales, the illusion creates a convincing selling point. The busy restaurant becomes even busier, this is a psychological business truth that manifests in many different scenarios and situations.
There are obviously many other factors that can influence the price. However, this is one of the most foundational and more frequently seen dynamics. A blockchain that has much to offer, but is underutilized is unlikely to experience any recognition from the market, in terms of price. However, a significant rise in users and transactions will encourage onlookers to take a closer look. A spike in certain metrics, combined with newly discovered “use cases and benefits” now has the ability to usher in a price revaluation.
True adoption, and for the right reasons, is at the heart of true blockchain success, and ultimately an increase in market cap. This is the road to true and significant price appreciation. Zoning in on price appreciation with an expectancy outside of these dynamics is putting the cart before the horse. At the end of the day, a Cryptocurrency’s true selling point is its use case, adoption, and direct benefits to the user. Expectations need to be aligned with manifestations. That’s it for this one, see you next time!