Cryptocurrency future | Why Crypto is Here to Stay and Not Going Away 09.23.2022
In this video, Towerpoint Wealth’s president and Sacramento wealth manager Joseph F. Eschleman, CIMA® addresses the following:
- Common concerns about the cryptocurrency future, and why we believe that crypto is here to stay and not going away.
- What decentralized finance, or DeFi, is, and how cryptocurrency is shaping its future (look out, banks!).
- Mainstream crypto adoption trends and the Great Wealth Transfer.
- Why cryptocurrency is potentially a good alternative investment to better diversify your portfolio (is it time to tiptoe towards that crypto?).
Bitcoin is by no means new –if you can believe it, it has been more than 13 years since the digital currency officially launched! As of June 2021, more than 220 million people owned digital assets. The blockchain technology that supports it continues to prove its value. Last year, Bitcoin settled over $13.1 trillion in transactions, up 470% from 2020, a figure that represents over half of the US’s GDP for the year, and more than what Visa, one of the largest payment processors in the world, settled last year. This bodes well for the cryptocurrency future!
Throughout history, civilizations have used cattle, squirrels, jewels, wine, and seashells as money. And before sovereign currencies took hold, gold was the medium of trade for many nations (and to this day still is a very good store of value). Compared to gold, Bitcoin is a baby, and many other cryptocurrencies are still in their infancies. However, each day crypto remains accepted, active, secure, and continues to grow in popularity and usage, it will become more and more mainstream. To be clear, bank notes and credit cards were not made for today’s digital age – but crypto was!
Global finance is moving away from being centralized (money being held by banks, which have the goal of earning profits) to being decentralized, where blockchain technology eliminates the need to use profit-seeking intermediaries and third-parties to lend, spend, trade, and borrow. As a group, both Millennials and Gen Xers have a much higher level of interest in decentralized finance and a lower level of trust in traditional institutions. Now, 83% percent of millennial millionaires own digital assets. Over $68 trillion is set to be transferred from Baby Boomers to Millennials and Gen Xers over the next 25 years.
We believe that the adoption of cryptocurrency will be much like the adoption of other successful technology: It usually starts off slow and measured then quickly accelerates! Consider the internet: In 10 years, the internet growth went from a handful of users to practically the entire world. In 2021, consumers spent more than $871 billion online, a 44% increase from 2019. A digital future likely means a cryptocurrency future.
In the past two years, the US created 29% percent of its current money supply. Governments and central banks around the globe create money when they need it. The result? Monetary, price, and asset inflation. But Bitcoin has programmed scarcity–one of the benefits of bitcoin is that its supply cannot be manipulated or devalued by fiscal or monetary policy.
Questions about how to integrate crypto into your longer-term investment portfolio? We welcome opening an objective dialogue with you about the advantages, disadvantages, risks, and considerations involved. Contact Towerpoint Wealth