Ramón Ferraz has more than 15 years of experience as a strategy consultant focused on the banking an
Trends come and go, but some things in our world stick around and become the new way of life. When the internet first emerged in the early 90s, no one was quite sure of the potential and how it would permanently change the world and the way our society functions.
We could look at cryptocurrency the same way, as a sort of unknown player in the finance and commerce world, but one that may have a lasting impact on the future, thanks to media attention, the expansion of blockchain, and its numerous applications with crypto.
The era of cryptocurrency really opened up in 2009 when Bitcoin came into play, leading to the supply and demand that we see today. Now, there are over 2,700 cryptocurrencies that exist, according to CoinLore － a steady increase from the one that started it all only a decade ago.
In such a short timespan, we saw the avalanche of entrepreneurs and techies that joined forces to enter the market, hoping to replicate the success Bitcoin enjoyed.
While 2018 ultimately saw the bubble burst, it was the years leading up that showed how much of an interest had emerged into the new digital asset.
From 2014 to 2018, in only a short four years, as the price of Bitcoin soared to incredible heights, trading on exchanges did too. Chris McCann estimates that in that period cryptocurrency exchange increased 10,000 fold.
The resulting craze over crypto, namely Bitcoin, led to the soaring of the price, where it ballooned from $1,000 per coin to $14,000.
Of course, we mentioned, the bubble eventually burst, but interest didn’t, leading to the over $224 billion market cap that is crypto today.
The interest surrounding crypto didn’t come out of thin air, though. Hollywood, the press and social media played key roles in driving the curiosity and demand behind the coin. Each one plays off of the other in propping up the topic or entity in question. And it often starts with social media these days.
With one billion users active on Facebook, and social media platforms alike, have the power to push a brand, idea, or item of interest to the top of the trending charts. We see this with a lot of successful social media campaigns regularly, spurred on by social media attitudes.
BittsAnalytics demonstrates exactly how the price of cryptocurrency is influenced by that exactly. In late October 2018, BittsAnalytics noted that right after social media sentiment rose over Bitcoin, the price shortly thereafter followed.
Similarly, in January of 2018, when Bitcoin sentiment on social media dropped, the crash began to take shape. Although, it was the central driver behind the collapse, the sentiment certainly had an effect on the price and demand.
We can also see in the press and in Hollywood that the social awareness about Bitcoin gradually emerged. Bitcoin was first notably highlighted in CBS’ The Good Wife in an episode where Mad Money’s host, Jim Cramer, comments on it and actress Julianna Margulies explains what it is.
Even if fans of the show didn’t quite fully grasp the concept, the cryptocurrency community certainly saw it as a positive step toward public awareness and growth.
The press also played a pivotal role in the rise of cryptocurrency prevalence.
It was, arguably, the reporting of another financial crisis in Europe that led many in the public to central idea behind crypto － separation from the big institutions.
The 2012 financial crisis in Cyprus reported by Bloomberg, led to an IMF proposal in which the government would have to take approximately 6.8% of savings from bank account holders in the country to stay afloat and avoid economic collapse.
Fearing the same scenario taking hold in Spain, which at the time had been limping through the worldwide economic recession, Spaniards reportedly began searching through Google for Bitcoin investment opportunities, in light of the Cypriot calamity.
It arguably drove up the price and brought the once shadowed asset into the spotlight.
The 2008 collapse, which generated mistrust within big banks, coupled with the crises taking place in Europe only served to lead asset-holders to the place that was not hitched to the banks that had failed them: cryptocurrency’s biggest star － Bitcoin.
This is where the creators’ dreams had started to become a reality and the rise of cryptocurrency also cemented itself.
But it’s not without the technological means that the full manifestation of decentralized assets and a market could be realized.
Centralized banking methods were still needed in Europe to execute simple transactions and exchanges, where a Single Euro Payments Area (SEPA) transfer was required, in addition to a special code, a rather complex series of transactions to buy coin.
With these types of transfers, it became difficult for the user to trust what likely appeared to be a less secure system.
They would be inclined to feel like they may or may not receive their coins in exchange for payment transfer, and often, it would take up to three days to receive.
The blockchain technology was there to supply the tracks for the cryptocurrency train to ride on, but the ability to serve a mass audience was lacking, with hashing taking potential hours to complete, at the hands of anonymous individuals handling the transaction calculations.
Now, as the demand for crypto has risen, we see companies, such as Temtum, surfacing to provide card schemes per second capacities and speed.
Most importantly, however, the user experience was still not on a level ready for mass dissemination; blockchain wasn’t enough, because there weren’t many applications available to support large user communities, as had been created for bank account and investment portfolio holders.
Users also required a desktop to execute transactions, but the new era of smartphones, beginning in 2013, changed it all. Simply downloading applications and executing maneuvers or transactions on a smartphone provided an easier alternative to users to invest, and thus increase interest in cryptocurrency.
With a number of applications and companies offering services on the Apple Store and Google Store, the opportunity to invest in cryptocurrency is available to a mainstream populace. Together with the large-scale capacity developments in blockchain and user-friendly platform options for smartphones, cryptocurrency supply, with over 2,700 coins in existence, is able to connect to the growing demand － driven by social media, press and growing mistrust in the global financial system governed by banks.
Today, we now see the enormous potential that cryptocurrency has and the sky may be the limit.
Ramón Ferraz, CEO of 2gether, the first crypto-focused collaborative financial platform is a serial entrepreneur and former consultant with broad experience in banking strategy, open banking and value transformation. He has 15 years of experience in tier 1 consulting ﬁrms A.T. Kearney and Monitor Deloitte, focusing on the ﬁnancial services and private equity industries, and has co-founded and led start-ups in the lodging and student accommodation industries.
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