Has the world become bored with cryptocurrencies?

Since the boom way back in December 2017 it seems that the market has had phases of interest but nothing like the levels seen two years ago. Since the Libra announcement things seemed to have changed. It feels like the crypto market is trying to replace or compete with traditional finance. In some ways that was the good thing about Bitcoin. It was different, slightly rouge. 

Libra looks like it wants to address an issue with traditional banking, bank the unbanked. Lower transaction costs and simplify the global payments system. This has forced the hand of Central Banks and the governments. China amongst others are creating their own digital currencies to rival Facebook's Libra. This will create more competition in the digital space but it could still be a good thing for the rebellious currencies like Bitcoin, Ether etc. as they may move back into the shadows.

The Securities and Exchange Commission have shut down the idea of a Bitcoin ETF for now and that seemed to be the only trigger for another bull rally. Even though since that point we have had the launch of the Bakkt Exchange and the announcement of regulated Bitcoin and Ether options by both CME and Bakkt. For me, this announcement was bigger than the ETF one in terms of bullishness. In the world of finance, options contracts are seen as an insurance product and this could help attract much larger investors to the area but the fact that it is a derivatives product means it will not affect the underlying price. Nevertheless, adding professional products like options regulated by an exchange can only be a positive, if people believe making the market more accessible to large investors is a positive thing. Options contracts are often used for speculation on their own too so that will bring a whole new kind of game to the crypto world. Hopefully the more contracts on offer the cheaper they will become.

The google search interest clearly moves in line with the peaks and troughs of the crypto market. Now if you follow some of the altcoins it works pretty much the same as it did with Bitcoin in the past. Coins like Tezos (XTZ) and VeChain (VET) are gaining more traction in regards to search and exchange-traded volume, although some have been around a while.

The future

The chart below represents the amount of volume traded on the exchanges listed at the top of the chart. As you can see the trend is heavily downward in its orientation. I dont think this is a phase maybe we are entering the new normal. The market has now become bored with Bitcoin and we are filtering out the fad chasers. This is by no means a bad thing as it will lead to a more normal price discovery for the major digital assets. What does need to develop, is the use cases. Bitcoin was seen as "shady" in the past, now it has been proven that transactions can be tracked and traced. So a more legitimate future may be in the offering, making it common to pay for normal goods like food and rent would be a great start. It is great to have an alternative choice to traditional fiat currencies and it doesn't matter if people like it or not Bitcoin is here to stay.

btc exchange traded volume

(Source: bitcoinity.org)

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