More and more large institutional and corporate investors have joined the cryptocurrency market and added a considerable amount of Bitcoin to their investment portfolios. At the same time, they have opened up allowing their customers to invest in Bitcoin or pay in Bitcoin. It seems that Bitcoin has been recognized. Currency can effectively hedge the risk of inflation.
Many Bitcoin advocates quickly came to the conclusion that Bitcoin has finally gained mainstream adoption. Although this is not true, in fact, the speed of public adoption of Bitcoin is gradually increasing.
The adoption curve of Bitcoin is significantly faster than the growth of other mainstream global technological infrastructures, such as fixed-line telephones and the Internet. Cryptocurrency analyst Willy Woo recently compared the growth rate of Bitcoin adoption with the development of the Internet on his Twitter , deducing that one billion people will own Bitcoin in the next four years.
The public is adopting new technologies faster and faster. Bitcoin has been adopted by the public faster than we have seen from other technologies in the past. However, this only shows that Bitcoin or cryptocurrency is a relatively significant development, and does not mean that this is a unique feature of encryption technology. The speed at which brand-new commercial technologies are adopted is increasing exponentially.
Thanks to the rapid development of globalization and instant messaging, the dissemination of new products and concepts is many times faster than before. You can refer to the chart below, which details the adoption rate of household appliances over the past 120 years. Although considered a necessity today, fixed-line telephones, running water, cars, and heaters have taken decades to reach mainstream adoption rates.
To reach the level of mainstream adoption, a large amount of infrastructure must be built. For example, products such as fixed-line telephones must generate network effects in order to promote new technologies beyond linear growth and further upgrade to exponential growth. Imagine if there are only nine people connected to the fixed-line network, it would take a lot of effort to convince the tenth person to join the same network. On the contrary, if the network has already connected other telephone users throughout the city, it will be relatively easier to persuade the ten thousand people to use the fixed-line telephone network.
Imagine if there are only nine people connected to the fixed-line network, it would take a lot of effort to convince the tenth person to join the same network. On the contrary, if the network has already connected other telephone users throughout the city, it will be relatively easier to persuade the ten thousand people to use the fixed-line telephone network.
Thanks to the mature development of computers, the Internet, smart phones and social networks, modern new inventions can have a faster adoption rate. As can be seen from the following chart, one of the most obvious examples may be the development of tablet computers, which have grown from 0% to 50% adoption in just a few years. Part of the reason is that modern technology is mostly built on existing infrastructure, and it also shows that the current consumer relationship is closer, so people are not so afraid to try new things.
Bitcoin as a digital currency is based on a long-standing and mature technology, so it can show high-speed adoption data.
Comparison of Bitcoin and Internet Adoption Ratio Although the Internet has been developed for a long time and its adoption rate is also very eye-catching, the performance of Bitcoin and the underlying technology of the blockchain seems to be even better. In the early days of its rise, Bitcoin grew faster than the Internet in the early 1990s, and is currently expected to reach about 1 billion users in the next four years. Interestingly, the chart produced by Cane Island Digital Research below shows that the application rate of the Internet seems to have a very similar trajectory to the price of Bitcoin.
According to Glassnode's data, during the 2017 bull market, a large number of new addresses joined the Bitcoin network, forming a very large wave of adoption. However, the data has dropped after the encryption winter, but now we can see that the adoption number has recovered, and an average of 560,000 new addresses are connected to the Bitcoin network every day.
What is driving the gradual increase in the adoption rate of Bitcoin? The
cryptocurrency bull market in 2017 was mainly driven by retail investors and speculators, while the current bull market is driven by institutional investors and corporate investors. Some well-known international companies have begun to buy Bitcoin publicly, including MicroStrategy, Square, Galaxy Digital Holdings, Hut 8 Mining, Voyager Digital and Tesla (Tesla), and more and more successful investors and innovative financial products have appeared. For example, cryptocurrency ETF, etc.
After experiencing the harsh and long crypto winter after the 2017 bull market, many large financial players once believed that Bitcoin was nothing more than a Ponzi scheme, indicating that they would not accept cryptocurrency and Bitcoin. However, looking at today’s development, Bitcoin has far surpassed its recovery and has achieved full-scale vigorous development. Many early opponents later changed their positions and stated that Bitcoin as a tool for hedging inflation does have a certain value, and more and more Like the digital gold of the new era.
Michael Novogratz, the founder of Galaxy Digital, believes that the price of Bitcoin will rise to $100,000 by the end of 2021, and he is not the only one to make this prediction. A well-known cryptocurrency analyst named PlanB has developed a Stock-to-Flow Model (S2F) and made similar predictions for the price of Bitcoin, and the model expects Bitcoin’s value in 2020 The price movement was later confirmed to be very accurate.
Bitcoin is currently hitting the next historical price high, and its rising price will also help further increase its adoption rate. In order to find a better way to preserve wealth than cash, companies have begun to join the ranks of investing in Bitcoin, so as not to miss the train of value growth. News reports that more and more international companies buy bitcoins also encourage existing cryptocurrency investors to buy more bitcoins and introduce the concept of cryptocurrency to new investors.
Where are we in the adoption cycle now?
If you are reading this article, it means that you have at least roughly the basic knowledge of Bitcoin, and you may also have a few Bitcoins on hand, and you are likely to know many friends who have basic Bitcoin knowledge. It is also possible that a lot of bitcoins have been purchased in the past few years. But don’t be fooled, Bitcoin is far from reaching the same mainstream adoption level as tablets, smartphones, and even wearable devices.
According to the theory of communication professor Everett Rogers, the following model can explain how and at what speed new concepts and technologies spread, allowing us to understand the different adoption cycles of any technology. Adopters can be roughly divided into the following categories, including innovators, early adopters, early majority users, late majority users, and lagging users. The yellow line is the so-called S-curve, and I believe you will read it when you talk about articles about Bitcoin adoption. We are now above the threshold of early adopters and early majority users.
If you believe that Bitcoin can become the next generation of digital gold, then you are in the minority. This is not because the existing information can indeed prove that this statement is wrong, nor is it because only a few people believe this prediction. In fact, there are still many people who need to formally learn about Bitcoin, understand its value and why. Can obtain amazing growth potential. For early and patient investors, this may be good news, because when Bitcoin really becomes the new digital gold, large profits will be reduced, and investing in Bitcoin will be similar to investing in gold. response rate.