Perhaps Art Cashin, UBS director of floor operations at the New York Stock Exchange, is right perhaps the Bitcoin rally we are seeing since about August is one big case of FOMO (Fear of missing out). But while Cashin goes bearish on that equation, maybe it is all part of the Bull run to mainstream adoption.
Cashin thinks that Bitcoin has gone ‘parabolic’ and that things won’t end well, but a little perspective helps. Factoring in the growth as adoption, and the actual size of Bitcoin, there is no real reason to imagine Bitcoin taking the parabolic shape.
Bearish Cashin
As a UBS trader on the stock exchange, it is easy to see that Cashin is an advocate for traditional investment avenues. Bitcoin breaks with a lot of norms that traditional investors hold dear. It often leads to a negative slant in their view, but their view should still be considered and analyzed.
"Bitcoin has gone parabolic, so that usually doesn't end well," said Cashin. "I think we're in the fear-of-missing-out phase now.”
“I think initially there was some concern. I am told — and take this with a huge grain of salt — that the movement is even beginning to worry some people in the Federal Reserve."
The points he raises, about fear of missing out, really is the key here. Its parabolic nature and the clear rumor of the concern from the federal reserve should indeed be taken with the specified grain of salt.
Adoption, adoption, adoption
Everywhere you look Bitcoin is breaking into the mainstream. Its real rally began after the concerns of a ‘civil war’ were eased as Bitcoin Cash joined the party. Wall Street started warming, despite a few bad, Jamie Dimon-shaped, eggs and the general population are also starting to get stuck in.
In the US, there was tangible evidence of the adoption as Coinbase, one of the larger exchanges in the country, managed to outdo large stock Brokerage company Schwab in terms of users.
Asian Markets
The Asian demand has soared most recently, as individuals start to take more than an observatory role in Bitcoin. Even with the ban of the digital currencies in China, the socialist republic managed to stay afloat with their market push.
Moreso though, it has allowed other Asian Markets to flourish, notably, Japan.
This can easily look like a fear of missing out scenario, with people flocking just to be part of this phenomenon, but what is portrayed in the use is very different to what is actually going on.
Small fish
Bitcoin looks to be this gargantuan beast, sucking in money from investors across the world, yet, even with a $300 bln market cap for the whole cryptocurrency market, it is a drop in the ocean.
Looking at other markets, and piling them with Bitcoin, suddenly, the digital currency sector looks minuscule.
Real estate, commercial and retail, equities, securitized debt, farmland and gold amount to a market of $372 tln. Bitcoin’s part on that? $0.3 tln
More to come
Therefore, there is still plenty of room for Bitcoin price to grow, as for the cryptocurrency market to grow.
At the moment, it can be estimated that less than half a percent of the global population are vested in cryptocurrency, when that figure reaches 30, 60, even 90 percent, things will be very different.
According to Mihail Lala - founder and creator of WAWLLET:
"Gravity is the key element. The investment rivers fed a 300 bln lake due to a natural flow. The market is attracted by need and opportunity. We are just at the beginning of early majority. The lake is just 15 percent loaded."