As I listened to the recent comments from crypto asset skeptics saying, “I told you, there is no such thing as value,” one thing became clear to me. In other words, I had not fully appreciated how much the public’s image of crypto assets had changed since the last time prices rose from a bear cycle.
During the last bear market, crypto assets were a new type of money, a global computer, an incentive for engagement, and a governance value.
But now, for the average person, crypto assets are markets.
Like many of you readers, I was busy explaining to family and friends over the holiday season that crypto assets are not “over”. This misconception was strange for a while, but at some point I understood.
The crypto asset market has not been financialized. We are aware of that as much as we are aware of the damage to image and sentiment caused by the collapse of the people and organizations that achieved financialization and the people and organizations that profited from it.
But rather, crypto assets have become just another market for those on the sidelines who don’t understand it well. Just a market. With the market in distress, the concept is clearly no longer relevant.
A Story That is Easy to Understand and Receive
In retrospect, it is not difficult to understand how this shift came about.
Growing interest from institutional investors (Goldman Sachs! Fidelity! BlackRock!)), prices (up 20% in one day! ), prices (up 20% in one day! Down 80% since the beginning of the year! Fraud (Ragpull! Unauthorized access!)), and regulatory concerns (Protect Investors! Protect the financial system!) generated eye-catching news and more of the same.
As the media reported news about crypto assets, the association of “crypto assets” with “high risk” was repeated and reinforced.
Perception and Image
This is not to say that the media is to blame. Many media outlets do an excellent job of communicating the innovative aspects of the crypto asset industry. But perceptions and images tend to focus on what is easy to understand.
The public is familiar with the market but does not necessarily understand the Merkle Tree. Price movements are easier to visualize than consensus mechanisms. Increased interest from institutional investors is easier to understand than weighted diversified liquidity pools. Market stories are comfortable and therefore more likely to be popular than technology stories. Stories about risk are more received than stories about innovation because dramatic developments attract greater interest.
The Duality of Crypto Assets
Hearing this, some people (especially those involved in crypto assets) may intuitively think to focus more on the technology aspects of crypto assets. Many, including myself, have argued that. But there is another fundamental aspect that is certainly plausible but has been largely overlooked. It’s an asset and a technology.
We understand that crypto assets offer speculation and investment opportunities. We also know that they are a fundamentally new technology. We in the industry understand that crypto assets have both aspects.
The Challenge of Understanding Crypto Assets as Technology
But it is difficult (especially for the general public) to understand that crypto assets are a technology.
For the first time in history, we have a tradable asset that embodies innovation. Investors can invest in technological advances through stocks and exchange traded funds (ETFs). But they are routine means of return that become accessible to the public long after the innovation has first been tested.
Crypto Assets vs Traditional Tech Companies
Amazon, for example, was founded in 1994 and went public after struggling as a startup for three years. Facebook was founded in 2004 but went public in 2012 were considered too risky for mainstream investors before they went public. Even after their IPOs, they were extremely volatile and remained so for some time.
And even these two companies are not necessarily appropriate comparisons. Neither Amazon nor Facebook are new technology in the sense that crypto assets are. They are not decentralized, they are not open-source, and they do not rely on cryptography for security. This is what makes crypto assets truly unique, and it is this uniqueness that is often overlooked in the public’s perception of them as just another market.
The crypto asset market has the potential to revolutionize the way we think about technology and its role in the economy. As the industry matures and becomes better understood, we should strive to educate the public on the true nature of crypto assets and how they differ from traditional markets. Only then can we truly appreciate the new philosophy of the market that crypto assets embody.
Recommended reading: 5 Tips for Beginner Bitcoin Traders
Recommended reading: Hardware Wallet
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Frequently Asked Questions
The main idea behind the text is that the public’s perception of crypto assets has changed from a new form of money, a global computer, an incentive for engagement and a governance value to just another market.
A: The author’s opinion is that the crypto assets market has not been financialized, but it has become just another market for those who don’t understand it well and that the public’s perception of crypto assets has changed.
The main reason for the change in the public’s perception of crypto assets is that the media has reported news about crypto assets as high risk and this association has been reinforced.
The author suggests that the public needs to be educated on the true nature of crypto assets and how they differ from traditional markets, in order to understand the new philosophy of the market that crypto assets embody.
Crypto assets differ from traditional tech companies in that they are decentralized, open-source and rely on cryptography for security, which makes them unique. This uniqueness is often overlooked in the public’s perception of them as just another market.
Crypto assets have the potential to revolutionize the way we think about technology and its role in the economy. They offer speculation and investment opportunities, as well as being a fundamentally new technology. They also provide a new way for investors to invest in technological advances.
The media’s portrayal of crypto assets as high risk has reinforced the association of crypto assets with high risk in the public’s perception, and this has led to a change in the public’s perception of crypto assets.
Crypto assets differ from stocks and ETFs in that they are a tradable asset that embodies innovation, whereas stocks and ETFs are routine means of return that become accessible to the public long after the innovation has first been tested.
The crypto asset market is unique compared to the traditional market, as it has not been financialized, it is a new type of money, a global computer, an incentive for engagement, and a governance value. It is also decentralized, open-source, and rely on cryptography for security, which makes it different from traditional market.
The industry can improve the public’s understanding of crypto assets by educating them on the true nature of crypto assets and how they differ from traditional markets. It can also by highlighting the benefits and use cases of crypto assets and promoting transparency and security in the market.