The institutional investment boom has both positive and negative effects on bitcoin adoption.
In the cities you learn to use BTC with the libertarian approach proposed by Satoshi Nakamoto.
Rosita is an entrepreneur who has just opened a small food business in El Zonte. The young Salvadoran is part of the group of businesses that accept BTC payments in Bitcoin Beach, the pioneer citadel of the Central American country.
In front of other entrepreneurs, Rosita explained her project. He did it based on what he has learned about how to make a business plan linked to the liberating power of Bitcoin as a means of payment. You have just joined the thousands of businesses and people Growing Adoption of Cryptocurrency Pioneer in Circular Economies of all the world.
From El Salvador to countries in Latin America, Asia and Africa, these Bitcoin citadels have become hotbeds for the formation of new bitcoiners. Particularly from those who profess a free, decentralized and private currency, which does not depend on any government or bank, as Satoshi Nakamoto proposed when he created Bitcoin in 2009.
These bitcoiners are inspired by the originals, and are a type of fan that the writer Gustavo Godoy describes as “rebels.” The way these enthusiasts use cryptocurrency contrasts with the approach of those who see BTC as just an investment opportunity.
We thus find ourselves facing two types of bitcoin fans: the market bitcoiner and the business bitcoiner.
The contrast between the two is clear if we put people from the citadels or a new bitcoin adopter like Rosita, against enthusiasts like Larry Fink, CEO of BlackRock, one of the first billionaires to admit to investing in BTC. By 2021 Fink expressed his faith in cryptocurrencies and envisioned that BTC could potentially evolve as a global asset.
Fink’s remarks came alongside announcements from other billionaires, including Paul Tudor Jones, Bill Miller and Stanley Druckenmiller, who also own and endorse bitcoin. The list of these new bitcoiners has become long. According to Forbes calculations, 3 out of 10 billionaires have invested in bitcoin or cryptocurrencies in recent years.
The emergence of this type of bitcoiner, the business one, comes hand in hand with the rise of institutional adoption. The interest of large companies (and countries like El Salvador) has led bitcoin to rise to unsuspected levels in recent years.
These companies, like many people who have entered the ecosystem between 2020 and 2021, were attracted by the price increase.
The rise that bitcoin experienced in 2021 was one of the factors that led many businessmen to look at cryptocurrency with different eyes. The tendency gained strength when BTC was quoted at a value close to USD 70,000, the highest reached in its history.
Currently, a large majority of these institutions continue to invest, despite the bear market that marked the industry in 2022. These investors, as indicated by the resultsfrom the survey conducted by Binance. The study indicates that 63.5% of these investors have a positive view of the sector for the next 12 months. About 88% of them foresee favorable developments in the market in the next decade.
The rise of this type of investment implies a huge movement of money from banks, investment funds, companies or governments that seek to diversify their portfolios and take advantage of the opportunities offered by the cryptocurrency market.
Institutional investment generates enthusiasm, but not all is positive
The incursion of institutional investors is seen with enthusiasm, especially when it is classified as an advance in terms of adoption. For analysts it is evidence of the reach achieved by BTC worldwide. A sample of the new image of cryptocurrency, which is no longer seen as a business “linked to illegal activities and with little future.”
However, the impact of institutional money on the market has two sides.
From a positive perspective, the inflow of institutional money increases the demand and value of cryptocurrencies by moving huge amounts of money. That’s good for those already in the ecosystem. In addition, it has beneficial effects on liquidity and market depth, helping to reduce volatility.
These investors also influence adoption, since his participation has wide media coverage. They thus promote awareness of the advantages of digital currency.
But there are other repercussions, not so favorable. Institutional money calls for greater regulation and supervision, limiting freedom and privacy. Market manipulation and speculation can cause bubbles, crashes or artificial price movements.
All these negative effects go against the principles that gave life to Bitcoinbecause greater state surveillance clashes with privacy and the concentration of power hinders decentralization.
The situation results in a game changer in the adoption of cryptocurrency. HE accentuates the difference between business bitcoiners and market bitcoiners.
It gives way to the rise of market bitcoiners, those who care about price, volatility and regulation. They are the ones who want power and influence. And while many of them claim to support principles of financial freedom, their objective is different from that of the rebellious bitcoiners.
The goal of a market bitcoiner is not the same as that of the rebellious bitcoiners because many of them do not even know the ideology cypherpunkcrypto-anarchist and libertarian who inspired the development of Bitcoin.
In contrast to what these market bitcoiners are after, for rebellious bitcoiners cryptocurrency is a way to resist the system and defend individual rights. They think that the value of BTC is not in its price.
It is this “rogue bitcoin” that is taught to the inhabitants of the citadels, who learn to spend it and put it into circulation (without holdear). This as the main way to achieve financial independence. That is the importance of the advancement of adoption in the citadels, teaching being necessary in order to counteract the rise of the market approach.