The cryptocurrency revolution finally moved to new heights when the Securities and Exchange Commission (SEC) approved 11 bitcoin exchange-traded funds in January 2024. Global investors flocked in like never before, adding nearly $5 billion in inflows on the first day of Trading. As a result, the intersection between traditional finance and digital assets is now well established, and a new door of opportunities will open for cryptocurrencies as the market continues to mature. This marks the end of a decade-long struggle for legitimacy, demonstrating the success of advances not only in blockchain technology itself but also in the public's perception of money. Encryption is here to stay.
In the early years of Bitcoin, many local cryptocurrency investors believed that Wall Street needed Bitcoin but not the other way around. This one-sided love affair has been true for some time, but mostly due to a lack of regulatory clarity around the world.
The transition from traditional finance to cryptocurrencies has always been limited and cautious, because every time there was a market correction, experts from Wall Street were more than eager to declare that “Bitcoin is dead” or “the bubble has finally burst.” In fact, the supposed death of Bitcoin has occurred more than approximately 400 times according to research conducted on Binance, but every rebound and bull market has not outweighed doubts about this emerging technology. It seems that traditional finance has finally woken up and accepted that the world has changed since the last global financial crisis and is ready for cryptocurrencies.
But now that the Bitcoin ETF has arrived, the cryptocurrency industry is celebrating the milestone with mixed emotions. In fact, it's been a journey getting there. ETF approval began in 2013 with the launch of the Grayscale Bitcoin Trust. Gemini's spot application in the same year was ultimately rejected in 2017. Then, the first futures ETF launched in 2021, paving the way for final spot approval this month.
Since the first approval, many early cryptocurrency investors have backed away from spot ETFs. They continue to adhere to the belief of “not your keys, not your coins”. Ultimately, their concern is that the mainstream institutionalism represented by these ETFs will challenge the concept of decentralization embraced by many in the cryptocurrency community.
Bitcoin investors are right to be cautious about centralization, and we are already heading in a new direction by embracing traditional finance. Instead of clinging to meaningless beliefs, now is the time for the Bitcoin industry to transform its current outdated infrastructure and focus on welcoming more people to enjoy the benefits of the digital asset.
We should not forget that one of Bitcoin's primary purposes was financial inclusion and helping the unbanked. But now with the cost of transaction fees on the Bitcoin network rising and the mining industry increasingly monopolized, the playing field is tilted in favor of those with the most resources and scale of operations.
However, Bitcoin has turned into a stronger store of value that attracts both cryptocurrencies and traditional finance, and institutional investors are rushing to accumulate as much cryptocurrency as quickly as they can. All of this is great for the industry's growth and maturity, but the people the technology was designed to help in the first place remain stuck as before.
Bitcoin has also faced many other challenges caused by the technology, such as the threat of multiple forks, discussions about increasing the block size, and bans imposed by a number of nation-states. With the approval of spot ETFs, the global regulatory environment has passed a difficult phase, and now feels more open and accepting for Bitcoin investors.
As Bitcoin becomes increasingly adopted by the mainstream in the form of various financial products, it provides a rare opportunity to directly help those in need. From payment companies to green energy transitions, Bitcoin can help struggling economies by shoring up their foreign currency reserves and bringing new investment opportunities through security token offerings and real-world asset products. Other innovations could include issuing tokens tied to Bitcoin or stablecoins for use in financial applications. The list goes on as Bitcoin can make an impact in people's daily lives by including them in the globally connected digital economy facilitated by blockchain technology.
Looking into the next decade, the revolution of improving lives around the world through cryptocurrencies will continue. Led by Bitcoin, this industry will continue to reshape understanding of the changing macroeconomic environment, geopolitical risks, and most importantly the concept of hard money. The industry has had incredible growth and is already impacting the way we interact in society. Sometimes changing the world feels like a movie where you don't know the ending, but every little step you take that makes you feel hopeful is all worth it.
This is a guest post by Yiwei Wang,Contributed by Nick Ruck, COO of ContentFi Labs. The opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
