There is a big contradiction in the crypto world. In fact, this was not always a big contraction, but it started to be as soon as the asset went mainstream for the first time and then crashed in 2018: cryptos are being regulated more and more, which makes them stronger financial assets at the same time that makes them less what they were born to be.
The main crypto contradiction is that the traits that have taken crypto where it is were that cryptos were private and autonomous, but in order to grow and survive the bear market, they are being less and less of that.
Assimilation Into The Mainstream
In order to be more popular, which was what the crypto community always wanted, digital tokens are being regulated all over the world. Australia is a great example, as it has registered 246 crypto exchanges in the country in less than a whole year.
Regulation gives a boost in credibility for the industry as the institutional investors, which are the biggest players of the market by far, are very keen on being protected by a well-regulated market. This can bring an immense improvement to the economy of the crypto world but it comes with a cost: cryptos are becoming less autonomous and democratic because of it.
When Bitcoin was created, Satoshi Nakamoto did not want to integrate cryptos with the market, he wanted to use Bitcoin to destroy it. However, most of the people which are highly influent in the Bitcoin world now are actually rich people which are a part of the market.
Also, most retail investors struggle to use all the freedom that Bitcoin can give them, as they are very accustomed to using very streamlined financial services. Satoshi Nakamoto was against all that and he believed in the power of the individual, but it looks like you have to sell out to become famous and to be accepted by governments all around the world.
Regulation Are Good, But They Are Not Compatible With Bitcoin’s Original Intent
If you ever wanted to use Bitcoin to escape the financial system, you are out of luck. All the attention means that more and more people are concerned with Bitcoin now. In India, you will even struggle to buy BTC, for instance, which is a shame.
The fact that countries like India and China are so against Bitcoin and the crypto world is mostly we like so much when countries have positive regulation. The industry can innovate and grow instead of being attacked. However, this takes us further and further from an autonomous system that is unlike the traditional financial system.
More countries like Japan and South Korea are tightening the regulation now and not letting users spend their Bitcoin anonymously, which is starting to make some old-school investors mad. In fact, it was only a matter of time. No government in the world will let such a powerful system run its course without interfering.
We can see the same happening in the United States. A lot of tokens generated by Initial Coin Offerings (ICOs) are now considered securities and only the rich can actually hold them, which as anti-Bitcoin in ideology as you can get.
With exchanges hacked all the time, the market facing a severe crash after investors got way too hyped and a lot of other concerns, it is easy to just let governments enact their regulation in order to be “protected”.
Is The Dream Dead?
Going back to Australia, Michael McCarthy, the Chief Market Strategist of CMC Markets, has affirmed that the crypto industry has moved on and got past its autonomous roots. Now, he defends, it’s all about regulation and improving safety.
Being mainstream will bring the investors a lot of money, so who cares if the dream dies? It looks like this is the road we going to travel on for now on. The anti-authoritarian roots of crypto are giving space for a view that is more akin to the traditional market and it looks like an inevitable move when you need institutional investors in order to see prices growing again.
What you do you think? It is a good idea to abandon the roots in order to create a wealthy future? Are you an old-school investor who believes that cryptos should go back to their roots? Pick your side as the future draws nearer and we all see the industry changing.