Imagine using your mobile phone or laptop to zap up cash instantly anywhere you go, without fees, no middlemen, and no waiting period for payments or deposits to clear. It’s a vision that pretty much sums up the appeal offered by digital currencies; a futuristic dream concept pushed to quicker maturity by all who embrace cryptocurrency.
iGamingVision envisions numerous obstacles for banks should the virtual dollar gain widespread acceptance. For one, banks would most certainly need to invent new, or alternate, methods for funding loans. Economists already warned that a digital currency could destabilize the global system used by financial institutions such as banks.
It is certain the strongest objections to the global adoption of a virtual currency could most likely originate from banks. For example, USA banks rely on deposits totalling $17 trillion to fund their business, while taking profit via the difference paid to interest and interest charged on loans. Other earnings include overdraft charges, account maintenance fees, and ATM costs.
With Wall Street being a key player in the economy of the world, iGamingVision decided to take a closer look at the exchange’s impact on cryptocurrencies. Afterall, it is one of the best known and referred to of the global financial centres, even though it physically only takes up a few Manhattan street-blocks it remains the core ideal of cutthroat capitalism? It is so many different things, the perception really depends on the type of person you ask. Although views differ widely, its impact on the global economy is beyond dispute.
Is Wall Street an Eager Cryptocurrency Investor?
iGamingVision does believe that hopefuls want Wall Street to become another eager investor in cryptocurrency and an investor ready to pour money into a relatively new market to enjoy great returns when the value of crypto skyrockets. At the same time iGamingVision does see how such projections could miss the mark. For one, Wall Street has already heavily invested in the crypto market, while the last thing it intends is to increase a precarious market via its own capital investment.
For the past couple of years, the differences between stocks and crypto remains one of the most heavily discussed subjects. Due to talks about blockchain investments being a mainstream phenomenon, the biggest issue is how does those new to investment perceive it, knowing the difference between the two is key. Stocks on the one hand come backed by legal companies expecting to turn a profit, which involves physical assets as part of the valuation. In contrast, cryptocurrencies come backed by companies and often these valuations are based purely on functionality, this requires a more subjective valuation which is not easy to predict.
iGamingVision explains that stocks are essentially fundraising efforts for companies, while cryptocurrency is a single currency with multiple purposes. An even more striking difference defines crypto as a purely computer coded currency, while stocks require trails of paperwork and fundraising motifs. The list of differences continues, experienced investors realise that great risk often goes hand-in-hand with great reward and while stocks offer regular returns cryptocurrencies often fail to perform to expectation in that regard. Long term crypto market investors have enjoyed returns of over 1,000%, short term ICO returns are generally around 150%.
Could Wall Street be a Cryptocurrency Killer?
The question, even bigger than the one asking if Wall Street would be the killer of cryptocurrency, is the reaction of regulators. Bridgewater Associates founder, Ray Dalio, believes regulators would attempt to kill crypto once it gains mainstream success. In the US, the wild rides of volatile cryptocurrencies already grabbed the attention of regulators. On further investigation, iGamingVision found that, Gary Gensler, acknowledged Wall Street’s top regulator is already working overtime to perfect a set of rules aimed at protecting crypto investors.
In June, El Salvador became the first country to adopt bitcoin as legal tender, in contrast, India expects to enact a law banning crypto that also penalizes crypto accepting traders. China ordered miners to shut all crypto operations as part of the state’s crackdown on its local crypto market.
Could Wall Street Stabilize Crypto?
Looking back in history, Wall Street crypto trading remained exclusive to fiat currencies or exchanges. You could buy or sell, and bitcoin was always the preferred currency used to settle purchases. Its limited supply made it easier to compensate for price increases, as more investors bought crypto and fewer sold due to an expectancy of greater returns the longer investors started holding on to their crypto stash. The market became exposed to the forces behind demand and supply, which caused mass fear of soaring prices amongst investors.
The factor responsible for reducing crypto volatility was the Wall Street’s introduction of bitcoin futures to its own exchanges and brokers. These futures enable people to speculate on the upside and downside of crypto, it balances the market by making it profitable to pump up or suppress crypto, which meant demand and supply became a less relevant factor. The introduction of trading bots further reduced the instability of crypto markets for the masses.
These bot programs employed by Wall Street could be highly profitable in low volatility environments, the key reasons that made bitcoin popular is its potential for massive profit which stems greatly from its volatility. What we’ve yet to see is the effect rejections will have, does Wall Street want cryptocurrency to die before reaching its heyday, even though it does offer profit avenues. But there is also its significant underlying threat, a factor that Wall Street cannot ignore and at the same time will be ambitious to overcome.
In conclusion: iGamingVision still sees stocks as a worthwhile more stable long-term investment for growing your retirement wealth, while cryptocurrency could be great for turning near-term profits. The one fact remains, if you decided to invest just a $1,000 in a certain crypto a decade ago, you’d have more than $15 million in returns. Cryptocurrency investment makes it entirely possible to reach your dreams of becoming a millionaire, although as with any investment it doesn’t necessarily mean every investor will achieve their ultimate goal.
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