San Francisco-based payments and financial services company, Square, Inc., started selling bitcoins a few weeks ago. Square, Inc. has been actively trading as a public company on the New York Stock Exchange (NYSE) for over 2 years now. Cboe, the largest U.S. options exchange, was the first to launch bitcoin futures. And now, bitcoin futures have also been launched by the global leader in futures exchange, the CME group. These are just a few strong signals or developments indicating that bitcoin and cryptocurrencies might be going mainstream.
As Bitcoin and other cryptocurrencies begin entering the mainstream stage, the current reality is still one where cryptocurrencies are traded on unregulated exchanges and P2P platforms. Is some kind of regulation necessary for bitcoin and cryptocurrencies to be considered truly mainstream? Conventional bank accounts are FDIC insured which gives their users a reasonable level of confidence that their deposited funds will stay safe. Bitcoin and cryptocurrency wallets are not. If government institutions are not or cannot regulate cryptocurrencies, then how or why should they insure them? A lot of questions, particularly about how to apply a legal framework to cryptos, remain unanswered.
Bitfinex, one of largest Bitcoin exchanges, has reportedly been hacked on multiple occasions. The estimated loss was in the tens of millions of dollars. What might be equally as concerning is that we know very little about Bitfinex. One of the few things we do know is that it’s incorporated in the British Virgin Islands. US regulators have even fined Bitfinex for not following certain registration policies in the past.
Despite these issues, traders and investors continue to use Bitfinex and other bitcoin and cryptocurrency exchanges. In fact, Bitfinex is ranked second, right behind Bithumb, in terms of 24-hour trading volume which runs into billions of dollars. Furthermore, the value and the market capitalization of bitcoin and cryptocurrency continues to rise faster than ever.
Even after the latest cryptocurrency price rallies, especially in 2017, many people still do not understand these complex digital currencies and the blockchain that they’re based on because of their highly technical nature. Perhaps this is why many people also fall victim to fake news or the misinformation propaganda. For example, in June of 2017, it was falsely reported that Vitalik Buterin, founder of Ethereum, had died in a car crash. The circulation of this fake news may have caused the market value of Ethereum to fall by approximately $4 billion.
When any technology or industry is in the process of “making it big” or going mainstream, there will always be people and organizations trying to bring it down because they might perceive it as a threat . JPMorgan CEO, Jamie Dimon called bitcoin a fraud and a bubble similar to the Dutch tulip bubble. In spite of these types of comments from public figures in the financial sector, blockchain technology seems to have the potential to disrupt a number of well-established industries. For instance, it seems that it might now become possible to dabble in real estate using a blockchain.
Overstock.com, a billion-dollar online retailer, has been accepting bitcoin as payment for several years now. When reputable and well-established companies start embracing cryptocurrencies, it’s a sign that they might be on their way to going mainstream. Even Bank of America seems to be joining the bitcoin and cryptocurrency world by developing a cryptocurrency exchange system. There appears to be significant potential for bitcoin and cryptocurrency to go mainstream.