The value of Bitcoin is on the rise again. But that’s not what matters to most crypto traders.

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The opinions and opinions expressed in this article are those of the author.

While Bitcoin recently hit new heights since the first half of 2021, the commentary surrounding Bitcoin and other cryptos is – where does all of this take us?

Mirroring the frenzy that dominated the market conversation in the first quarter of 2021, this conversation is both a logical result of the rapid rise in prices, and secondly something that overshadows the more substantial developments taking place in the market. space for blockchain and crypto assets.

More than the valuation of Bitcoin

One specific point that highlights this paradox is that as prices in the crypto market continue to recover and near historic highs, regulatory oversight continues to increase in virtually all jurisdictions.

While the specifics vary from country to country – from bans to more welcoming initiatives to a cautiously analytical approach – the faster and higher the crypto moves, the more the space comes under scrutiny. More on that later.

An additional point to emphasize is that this excessive focus on price alone actually undermines the original idea of ​​cryptocurrency; which is to be used as currency. If market participants are only focused on price points and believe they will increase over time, why would that be used for transactional purposes?

In other words, as exciting and dynamic as it may be to track the price of Bitcoin and other cryptos on a daily or hourly basis, it misses the basics.

Blockchain and crypto assets are well past the days when they were considered “internet” or “fake” money, so it seems appropriate that the discussion and analysis around crypto evolves far beyond mere observation. price levels.

Let’s take a look at some of the trends that are actually leading to wider adoption, and yes, higher prices for Bitcoin and other crypto assets.

Bitcoin is an asset

What might be seen by some as the most controversial driver of all is that Bitcoin is increasingly no longer seen as a currency, nor as a monetary alternative by the market.

This includes – quite obviously – policy makers and regulators, but also actions taken by private sector actors. The initial enthusiasm and investment in Bitcoin and other cryptos in 2016 and 2017 might have been driven primarily by retail investors, with institutions scoffing at the idea of ​​’internet money’, but this narrative has radically changed.

As institutions seek to hedge against inflation risks, hedge against currency devaluation, and have a buffer against geopolitical instability, Bitcoin is increasingly seen as a class of. active in their own right.

Ironically enough, being viewed as an asset versus a medium of exchange and being bought and held by large incumbent financial institutions have been the driving forces behind the continued rise in Bitcoin over the past 12-24 months.

This trend contrasts sharply with Bitcoin’s original idea of ​​disrupting middlemen and making these institutions obsolete.

Is crypto regulation a good thing?

Without delving into specific regulations, since they will vary a lot from jurisdiction to jurisdiction, the following general point is true.

Private sector actors and participants are not normally advocates for increased regulation, compliance requirements or tax policies. It is a perfectly reasonable position.

Taxes and compliance are a burden on all organizations in a specific industry, but are especially onerous for small organizations or new entrants to the space. This is also true in the blockchain and crypto asset space.

Taking a step back reveals the silver lining that is associated with this increase in regulatory and compliance action – the removal of the existential regulatory threat.

Since Bitcoin and other cryptos appeared on the market, there had been a constant undercurrent of fear and apprehension about whether regulators would end up banning these financial instruments.

As painful and painful as taxes and compliance can be, the fact that regulators are increasingly treating crypto like any other financial instrument indicates that the risk of being banned outright has all but disappeared.

Smart contracts, NFT and DeFi

Again, it’s easy to watch the gyrations of Bitcoin, still the industry leader in crypto assets, and assume that this is the major story – if not the only one – to watch in space.

Focusing only on Bitcoin might have been appropriate in 2016 or 2017, but as 2020 turned into 2021, we saw just how complex and extensive the space has become.

Ethereum (Ether) has risen to the leading position in many ways, serving as the core platform for smart contracts, non-fungible tokens (NFT), and decentralized financial applications (DeFi).

These new applications have led to the further development of affiliate applications that allow users to generate revenue streams, build new assets, and participate more fully in the crypto economy.

In fact, some speculate that Ether may one day overtake Bitcoin as the most valuable cryptocurrency through an event known as ‘flipping’.

Adoption by the nation state

El Salvador may have made the headlines in the summer of 2021 when President Nayib Bukele announced that the nation would start using and treating Bitcoin as legal tender in just a few months.

With this date quickly approaching, other countries have followed suit, with politicians in many other countries actively voicing their support for the adoption of Bitcoin as legal tender or for wider adoption of crypto in the economy. The continued support and buy-in from nation states (or even just politicians) is a monumental step forward for the industry.

Central Bank Digital Currencies (CBDCs) may become a competitor to Bitcoin and other crypto assets, but does that portend industry disaster? On the contrary, more crypto assets entering the market will only encourage better understanding, adoption and use.

Crypto has long been associated with price volatility, dramatic spikes, and even more devastating price drops. All of this certainly makes for great headlines and even better media coverage, but they overshadow the most important trends and stories that really move the industry forward.

As the blockchain and crypto asset space continues to mature, expand, and differentiate, it’s worth taking a look, realizing that Bitcoin is just the beginning, and turning around. towards the trends that will define the future of space.

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