Despite calls for a new bull run to take BTC and altcoins to new all-time highs on social media, a recent survey of institutional traders revealed that three out of four have no plans to trade digital currencies.
With ‘crypto’ out of vogue, institutions are turning their attention to machine learning and AI after the launch of ChatGPT in November 2022. More than half said these would be the most influential technologies shaping the future.
The JP Morgan survey, the seventh of its kind, surveyed 835 institutional traders in 60 markets. In 2022, blockchain and distributed ledger technology were tied second with machine learning and AI (after mobile apps) as key technologies that would shape the future. This year, 53% of respondents said AI was the key to the future, and only 12% said blockchain would be the most influential, while 72% have “no plans” to trade digital currencies or tokens.
Where will the new money for a bull market come from?
Obviously, this data-based report flies in the face of the narrative many digital currency influencers and media outlets are pushing right now. As they attempt to convince retail speculators that a new bull market is near, the reality is few have any spare cash to bet on digital currencies, and institutions have zero interest.
When asked what factors will have the greatest impact on markets in 2023, the JP Morgan survey respondents cited the risk of recession, inflation, and geopolitical conflict. With the SEC cracking down on staking in the U.S. for retail customers and credible rumors of a much larger crackdown in the works, it’s a safe bet that the touted bull market to come is mere fantasy.
Today @SECGov charged Kraken for the unregistered offer & sale of securities thru its staking-as-a-service program.
Whether it’s through staking-as-a-service, lending, or other means, crypto intermediaries must provide the proper disclosures & safeguards required by our laws.
— Gary Gensler (@GaryGensler) February 9, 2023
While we may get a short-term relief rally or Tether-fueled pump, speculators should be careful not to be lured in as someone’s exit liquidity.
Opinion: Blockchain IS the most important technology for the future
Institutional traders tend to be non-specialists; like all traders, they change their opinions depending on what’s in fashion at any given time.
While I agree that AI and machine learning will have incredible impacts on the future, it’s important not to dismiss the effects blockchain technology will have just because we’re in the midst of a bear market. Just as the Dot Com bubble burst in 2001, but the internet radically changed the world, so will blockchain technology.
To fully understand blockchain’s impact, it’s necessary to understand what it is. To do so, forget about the speculative price of tokens linked to various blockchains and look at the bigger picture.
Using Satoshi Nakamoto’s original unbounded protocol (BSV) as an example, it’s easier to see how blockchain will change the world in myriad ways. As a public ledger to which anyone can write transactions for fractions of a cent, it enables the following changes to occur:
1. Anyone can send money peer-to-peer with no trusted intermediary required. Bitcoin is and always has been a peer-to-peer electronic cash system. From large transactions to microscopic ones, it’s possible to send virtually any amount of Bitcoin anywhere on the planet with near-instant settlement and full traceability.
2. Data can also be sent over the Bitcoin network. Imagine uploading a photograph to a social media app like LaMint and receiving micropayments every time someone likes it. Bonus points: no Silicon Valley corporation will be harvesting your data or maintaining ownership of your photos when you do so.
3. Blockchain-based identities will eliminate much of the friction and hassle involved with proving who you are. In the not-too-distant future, it will be possible to link passports, birth certificates, and other credentials to an on-chain identity, allowing relevant authorities to attest to them and revealing only what is necessary to prove who you are for the purposes you need to. Watch Dr. Craig Wright’s The Bitcoin Masterclasses for more on this.
4. Scalable blockchains like BSV will disincentivize fraud and theft. While it’s possible to maintain financial privacy on the blockchain, there will be a time-stamped record of every transaction, meaning that when crimes occur, they will be much easier to investigate and prosecute. Think of blockchain as a universal truth machine. Privacy is built in, but if transactions break the law, there’s a provable record that they occurred.
5. Blockchain will usher in new economies based on micropayments. On Bitcoin SV, fees are thousandths of a penny, making it possible to pay for services it was never possible to do before. New (or established) credit card companies may run on top of Bitcoin, saving merchants vast amounts on fees, and it will be possible to make small payments or a cent or less for things like access to an online article or web server.
These are just some of the things blockchain technology makes possible. Truthfully, the changes it will bring about and its potential use cases are almost limitless. It will touch and transform everything.
I wouldn’t like to guess whether AI or blockchain will be more impactful in the long run, but I do know both will drastically boost the productivity of mankind, unlocking new economies of scale and ushering in a new era of prosperity.
Don’t count blockchain out just because institutional speculators don’t fancy it right now or because worthless tokens linked to bad tech are being repriced to their true value doesn’t mean there’s nothing here. Perhaps the ‘investors’ questioned in the JP Morgan survey should focus on allocating capital to the many new companies building useful applications on utility blockchains like BSV rather than trading tokens. After all, isn’t that what investors are supposed to do?
Watch: Enabling the Real World Metaverse
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.