JPMorgan Chase CEO Jamie Dimon, like many business-establishment peers who persistently sound the death knell for cryptocurrencies, is wrong.
As the Trends Research Institute has been forecasting, volatility in digital currencies will continue. Some offerings will crash. But the long-term trend is a crypto, not a fiat-currency-driven, future.
It’s a new world millennial order; cash is not part of their lives. Digital currencies to them are what gold once was for baby boomers – safe, comfortable and familiar.
In September, Dimon ratcheted up the anti-cryptocurrency hysteria. “Bitcoin is not a real thing and it’s solely speculative… and that there’s no need for it in the United States,” he said. “It will blow up.”
Since his comments, both positive and negative developments about cryptocurrencies’ future have rattled markets.
On one hand, China’s government has shut down its digital-currency exchanges; on the other, Japan, which has nearly 50 percent of Bitcoin’s investment, is handing out digital-currency-exchange licenses, expanding the scope of digital-currency investment even more in that country.
And South Korea, one of the bigger crypto markets, has banned initial coin offerings. That follows the lead of the United States, Canada, the UK and others seeking to regulate that aspect. The US Securities and Exchange Commission, for example, determined this summer that some coin offerings could be classified as securities and regulated under current law.
Indeed, even European Central Bank President Mario Draghi weighed in on the crypto craze, saying the ECB has no authority to regulate cryptocurrencies.
Despite these developments, crypto markets have forged forward. In fact, through August 2017, the year-over-year market cap for cryptocurrencies increased by more than 850 percent, from $17.7 billion to $177 billion.
To the business media, wild swings in crypto markets mean the bubble is about to burst.
That’s wrong.
There are powerful undercurrents to this trend that the banksters miss or care not to acknowledge.
Dimon and others are anti-crypto because, as financial broadcaster Max Keiser noted, “Bitcoin makes banks, essentially price-gouging intermediaries and socially unacceptable leeches, obsolete. Bankers rightfully fear for their jobs as Bitcoin replaces them.”
Cryptos are the digital coins of populists who have no faith in governmental or financial institutions, a fading connection to their nation’s currency and who essentially already are living cashless lives.
Digital currency, which isn’t backed by any government or physical assets, is anti-government. And anti-government sentiment is a powerful and growing global trend.
THE LONG REACH OF GOVERNMENT
The global nature of the cryptocurrency trend, impacting emerging and established economies worldwide, will endure many twists and turns in the road ahead as governments impose controls and regulations.
Still, the trend is clear: As the world goes cashless, cryptos are going mainstream.
We already have forecast how the world is shifting. We’re going from a society based primarily on ownership of material goods and their intrinsic value to one of accessing services. Too many analysts miss that.
The notion that digital currencies are speculative-only investments, because they have no physically measurable value, ignores millennials’ and subsequent generations’ cashless lives.
In China, for example, while the government cracks down on digital-currency exchanges, digital is an established way of life for the country’s 700 million smartphone users, many of whom make instantaneous digital transactions each day.
Large segments of the global population, without a physical connection to hard cash, have no emotional connection to their national currency. Therefore, they do not value it as previous generations have.
Thus, the cashless trend strengthens as societies become more comfortable with digital currency. That trend is further bolstered by global anti-government populist movements that oppose central banks and fiat currencies produced at will, backed by nothing and lacking intrinsic value.
TREND FORECAST: Trends are born, they grow, mature and die. The crypto trend is in its infancy. The entire cryptocurrency market, with more than 1,000 digital currencies and “alt” coins, has a total value of only $177 billion. That’s chump crypto change compared to the world’s $126 trillion global economy.
As more nations worldwide go cashless, and new cryptocurrency offerings widen, the general public’s purchase of digital currencies and investment in them increases. But the speed at which digital-currency investment is growing worldwide is prompting some governments to intervene.
They’re seeking to regulate, control or cease the growth of cryptocurrencies. Or, as in Japan’s case, they’re looking to create their own digital currency, an important trend that, as Keiser pointed out, is another nail in the antiquated banking system’s coffin.
Further, Goldman Sachs recently announced it was evaluating a new trading division for digital currencies, signaling that the Wall Street blue chip giant is taking the rise of cryptocurrencies seriously.
At some point, cryptocurrencies, unlike fiat currencies that governments produce at will and manipulate, will reach a market cap.